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Melbourne — Oil prices fell on Tuesday on concerns that power outages and flooding in Louisiana after Hurricane Ida will cut crude demand from refineries at the same time global producers plan to raise output.
US West Texas Intermediate (WTI) crude futures were down 41c, or 0.6%, to $68.80 a barrel at 2.45am GMT, reversing most of Monday’s gains.
Brent crude futures for October, due to expire on Tuesday, were down 46c, or 0.6%, at $72.95 a barrel, after gaining nearly 1% on Monday. The more active November contract fell 42c, or 0.6%, to $71.81.
The prospect that extended refinery outages will curb oil demand weighed on prices.
Hurricane Ida shuttered or curtailed output at six refineries in Louisiana that process 1.92-million barrels per day of crude, about 12% of US refining capacity.
“With companies assessing damages, a current timeline for how long shuttered capacity will be down is still uncertain,” RBC analysts said in a note.
With catastrophic damage to the grid in Louisiana, power outages could last three weeks, utility officials said, which would slow efforts to repair and restart energy facilities.
On the supply side, about 1.72-million barrels per day of oil production remained shut in the US side of the Gulf of Mexico as platforms were evacuated ahead of the hurricane, with companies expecting it to take days to get a full assessment of possible damage.
Also keeping a lid on oil prices is the prospect that oil cartel Opec and allies, together known as Opec+, will agree to go ahead with plans to add another 400,000 barrels per day of supply each month through December.
Opec+ will meet on Wednesday. Delegates say they expect the production increase to go ahead, however Kuwait’s oil minister said on Sunday that plan could be reconsidered amid concerns about raging Covid-19 infections in Asia limiting fuel demand.
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
Oil falls as hurricane cuts Louisiana output
Melbourne — Oil prices fell on Tuesday on concerns that power outages and flooding in Louisiana after Hurricane Ida will cut crude demand from refineries at the same time global producers plan to raise output.
US West Texas Intermediate (WTI) crude futures were down 41c, or 0.6%, to $68.80 a barrel at 2.45am GMT, reversing most of Monday’s gains.
Brent crude futures for October, due to expire on Tuesday, were down 46c, or 0.6%, at $72.95 a barrel, after gaining nearly 1% on Monday. The more active November contract fell 42c, or 0.6%, to $71.81.
The prospect that extended refinery outages will curb oil demand weighed on prices.
Hurricane Ida shuttered or curtailed output at six refineries in Louisiana that process 1.92-million barrels per day of crude, about 12% of US refining capacity.
“With companies assessing damages, a current timeline for how long shuttered capacity will be down is still uncertain,” RBC analysts said in a note.
With catastrophic damage to the grid in Louisiana, power outages could last three weeks, utility officials said, which would slow efforts to repair and restart energy facilities.
On the supply side, about 1.72-million barrels per day of oil production remained shut in the US side of the Gulf of Mexico as platforms were evacuated ahead of the hurricane, with companies expecting it to take days to get a full assessment of possible damage.
Also keeping a lid on oil prices is the prospect that oil cartel Opec and allies, together known as Opec+, will agree to go ahead with plans to add another 400,000 barrels per day of supply each month through December.
Opec+ will meet on Wednesday. Delegates say they expect the production increase to go ahead, however Kuwait’s oil minister said on Sunday that plan could be reconsidered amid concerns about raging Covid-19 infections in Asia limiting fuel demand.
Reuters
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