Hurricane Ida Weakens; Oil Drops, OPEC Meeting

After a four-week high, oil prices finally saw a drop on Monday after Hurricane Ida began to weaken. U.S Gulf oil production, which was approximately 1.74 million barrels per day was shut down due to the Hurricane warning in the region earlier. An OPEC meeting has been set up for Wednesday to further discuss output and an oil production boost.

The hurricane has weakened after 12 hours since its landfall and is now considered a category one hurricane.

Brent crude was down 35 cents or 0.5% at $72.35, having reached $73.69 prior to that, the highest since August 2nd. U.S crude fell 1% to $68.05 having been high at $69.64 earlier.

According to senior market analysis, Jeffery Halley, “Hurricane Ida will dictate oil’s near-term direction. If Ida weakens and its path of destruction is lower than expected, oil’s rally will temporarily lose momentum here.”

U.S gasoline was up by almost 3% while crude oil fell due to shut down on the Gulf coast. Brent crude has surged by 40% this year mainly due to supply cuts by OPEC+ and demand recovery from the previous year’s pandemic collapse.

OPEC is scheduled to meet oncoming Wednesday to discuss oil production output of 400,000 barrels per day.