SINGAPORE: Oil prices rose for a second session on Thursday, recovering from earlier losses as lower US production in the Gulf of Mexico following damage from Hurricane Ida supported the market.
Brent added 23 cents, or 0.32% to $ 72.83 a barrel at 02:21 GMT and West Texas Intermediate (WTI) crude rose 15 cents, or 0.22%, to $ 69.45 a barrel .
“US production is struggling to recover from Hurricane Ida,” ANZ said in a note. “Significant infrastructure damage and power outages mean Ida cut more supply after nine days than any other storm.”
About 77% of U.S. Gulf production went offline on Tuesday, or about 1.4 million barrels per day (bpd). The market has lost around 17.5 million barrels of oil so far. Offshore Gulf wells represent around 17% of US production.
U.S. crude oil production is expected to fall from 200,000 barrels per day in 2021 to 11.08 million barrels per day, the U.S. Energy Information Agency (EIA) said on Wednesday, noting that Hurricane Ida should lead to a larger drop than its previous forecast for a drop of 160,000. bpd.
Data from the American Petroleum Institute (API) showed that the crude drawdown for the week ended September 3 was lower than expected in a Reuters poll, but gasoline and distillate withdrawals were larger than expected.
API data showed U.S. gasoline inventories fell 6.4 million barrels for the week ended September 3, while crude inventories fell 2.9 million barrels . Inventories of U.S. distillates fell 3.7 million barrels in the same week, according to API data.
Oil was also supported on Wednesday as protesters in Libya blocked oil exports to Es Sider and Ras Lanuf, an oil engineer said at each of the ports, although other engineers said production in the fields that feed the terminals was not affected.