Oil gains for 2nd session as lower U.S. output supports

Reuters2021-09-09

SINGAPORE, Sept 9 (Reuters) - Oil prices rose for a second session on Thursday, recovering from earlier losses as a decline in U.S. Gulf of Mexico output following damages from Hurricane Ida underpinned the market.

Brent added 23 cents, or 0.32% to $72.83 a barrel at 0221 GMT and West Texas Intermediate (WTI) crude rose 15 cents, or 0.22%, to $69.45 a barrel.

"U.S. production is struggling to recover from Hurricane Ida," ANZ said in a note. "Extensive damage to infrastructure and power outages mean Ida has knocked off more supply after nine days than any other storm."

About 77% of U.S. Gulf production remained offline on Tuesday, or about 1.4 million barrels per day (bpd). The market has lost about 17.5 million barrels of oil so far.

The Gulf's offshore wells make up about 17% of U.S. output.

U.S. crude oil production is expected to fall by 200,000 barrels per day in 2021 to 11.08 million bpd, the U.S. Energy Information Administration (EIA) said on Wednesday, noting that Hurricane Ida should force a bigger decline than its previous forecast for a drop of 160,000 bpd.

American Petroleum Institute (API) data showed that crude drawdown for the week ended Sept. 3 was smaller than expected in a Reuters poll, but gasoline and distillate drawdowns were bigger than expected.

API data showed U.S. gasoline stocks fell by 6.4 million barrels for the week ended Sept. 3, while crude stocks dropped by 2.9 million barrels.

U.S. distillate stocks fell by 3.7 million barrels over the same week, API data showed.

On Wednesday, oil was also supported as protesters in Libya blocked oil exports at Es Sider and Ras Lanuf, an oil engineer at each of the ports said, although other engineers said production at fields that supply the terminals was unaffected.

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