Oil Up, Hits One-Week High as Recovery from Ida Damage Drags On

© Reuters.

By Gina Lee

AiVIF.com – Oil was up Monday morning in Asia, hitting a one-week high in a second consecutive session of gains. Continuous concerns about U.S. supplies, with the recovery from Hurricane Ida’s damage dragging into a second week, gave the black liquid a boost.

Brent oil futures was up 0.33% to $73.16 by 12:08 AM ET (4:08 AM GMT) and WTI futures gained 0.37% to $69.98. Both Brent and WTI futures were at their highest levels since Sep. 3 earlier in the session.

Around three quarters of U.S. Gulf of Mexico offshore oil production, or around 1.4 million barrels per day, has remained shuttered since Ida made landfall in the region in late August. The figure is roughly equal to what Nigeria, an Organization of the Petroleum Operating Countries (OPEC) member, produces.

Royal Dutch Shell (LON:RDSa) Plc said last Thursday that it had cancelled some export cargoes due to damage to offshore facilities from Ida. The statement from the largest oil producer in the region suggested that energy losses could continue for a few more weeks.

"To compound matters, more oil refineries in Louisiana have resumed operations, raising demand for crude oil," ANZ analysts said in a note.

Baker Hughes also said that the number of rigs in operation in the U.S. grew in the latest week, an indication that production could rise in the coming weeks.

All eyes are also on the oil outlook for 2022 from the Organization of the Petroleum Operating Countries (OPEC) and the International Energy Agency (IEA), due later in the day. It is widely expected that OPEC will revise its forecast downwards.

Meanwhile, the U.S. Commodity Futures Trading Commission said on Friday that investors raised their net long U.S. crude futures and options positions in the week to Sep. 7.