Oil hits one-week high as US supply concerns dominate

A maze of crude oil pipes and valves is pictured during a Department of Energy visit to the Strategic Petroleum Reserve in Freeport, Texas, United States, June 9, 2016. REUTERS / Richard Carson

  • Hurricane Ida impact cuts US supplies
  • Brent ranging from $ 70 to $ 74 for three weeks
  • OPEC sees Delta coronavirus variant weighing on oil demand

LONDON, Sept. 13 (Reuters) – Oil rose on Monday, supported by concerns about the shutdown of production in the United States due to damage from Hurricane Ida, analysts expecting prices to remain limited in a stable market over the next few months.

Brent crude rose 62 cents, or 0.9%, to $ 73.54 a barrel at 1332 GMT and US West Texas Intermediate (WTI) crude was 78 cents, or 1.1%, up to 70 , $ 50.

Brent has held between $ 70 and $ 74 a barrel over the past three weeks.

Oil prices may not have much room to rise in the short term, but at the same time, they are not expected to collapse anytime soon,” said Stephen Brennock of broker PVM.

The U.S. Energy Information Administration (EIA) said last week that it expected Brent prices to remain near current levels for the remainder of 2021, averaging $ 71 per barrel at fourth trimester.

“Markets still need clarity on the impacts of the virus beyond the very short term; and until we get that, it looks like most assets, including oil, could continue to drift sideways.” , said Howie Lee, an economist at Singapore’s OCBC bank.

The Organization of the Petroleum Exporting Countries (OPEC) on Monday lowered its forecast for global oil demand for the last quarter of 2021, citing the variant of the Delta coronavirus and saying that a new recovery would be partially delayed until the year next.

The producer group said in a monthly report that it expects demand for oil to average 99.7 million barrels per day (bpd) in the fourth quarter of 2021, down 110,000 bpd from forecast last month. Read more

Prices still found some support from the impact of Hurricane Ida on US production. About three-quarters of offshore oil production in the Gulf of Mexico, or about 1.4 million barrels per day, has been shut down since late August. Read more

“Hurricane Ida was unique in that it had a net bullish impact on the US and global oil balances – with a weaker impact on demand than on production,” Goldman Sachs analysts said in a note. dated September 9.

Further bad weather disruptions could be imminent, with Tropical Storm Nicholas in the Gulf of Mexico expected to turn into a hurricane in the coming days, the United States National Hurricane Center (NHC) said.

However, the number of platforms in service in the United States has increased over the past week, energy service provider Baker Hughes said, indicating that production could increase in the coming weeks. Read more

An increase in supply could also come from China’s planned release of oil from strategic reserves, while hopes for new negotiations on a broader nuclear deal between Iran and the West were raised after that the United Nations atomic watchdog on Sunday reached an agreement with Iran on delaying maintenance of surveillance equipment to keep it functioning. Read more

At the same time, two attacks on an oil field managed by the Colombian majority oil company Ecopetrol (ECO.CN) caused a fire and a spill of crude on vegetation, but no injuries, the company said. The La Cira Infantas field produces around 30,000 b / d of crude.

Reporting by Bozorgmehr Sharafedin in London Additional reporting by Naveen Thukral and Florence Tan Editing by David Goodman and Mark Potter

Our Standards: Thomson Reuters Trust Principles.

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