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8 Sept 2021
Oil Prices Climbed as U.S. Gulf Production Remained Low due To Ida
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On Wednesday, oil prices climbed up, regaining some of the overnight losses form a stronger dollar and choppy demand concerns, with a slow-moving production restart in the U.S. Gulf of Mexico and reopening of processing activities to provide support.
According to the Reuters, U.S. West Texas Intermediate (WTI) crude futures rose 43 cents, or 0.6%, to $68.78 a barrel at 0643 GMT, after sliding 1.4% on Tuesday following the Labor Day holiday.
Brent crude futures gained 34 cents, or 0.5%, at $72.03 a barrel after falling 0.7% on Tuesday.
ANZ Research analysts said in a note said, "The market is ... weighing up the impact of ongoing delays to the resumption of operations in the Gulf of Mexico,"
Producers in the Gulf are still struggling to restart the operations nine days after Hurricane Ida swept through the region with powerful winds and drenching rain.
According to the reports, it’s about 79% of U.S. Gulf production remained offline on Tuesday, with 79 production platforms still unoccupied. About 17.5 million barrels of oil has been lost to the market so far.
ING analysts said in a note that the refinery operations appear to be making a quicker recovery.
According to the latest situation report from the Department of Energy, only about 1 million barrels per day of capacity was temporarily closed, down from a peak of more than 2 million bpd, ING said.
"However, those refiners that have restarted are unlikely to be operating at full capacity at the moment," ING note added.
Analysts polled by Reuters expect, on an average, that crude stocks fell by 3.8 million barrels in the week to Sept. 3, and see gasoline stocks down by 3.6 million barrels and distillates down by 3 million barrels as seen on the economic calendar.