Picture: 123RF/PIX NOO
Picture: 123RF/PIX NOO

London — Oil prices remained steady on Thursday as the Delta variant of the coronavirus continues to weigh on the demand outlook, offsetting a decline in US Gulf of Mexico output because of damage caused by Hurricane Ida.

Brent crude rose 4c to $72.64 a barrel by 9.01am GMT and West Texas Intermediate crude fell 11c, or 0.16%, to $72.64.

About 77% of US Gulf production remained offline on Tuesday, equating to about 1.4m barrels a day. The market has lost about 17.5m barrels of oil so far.

The Gulf’s offshore wells make up about 17% of US output.

US crude oil production is expected to fall by 200,000bbl/day in 2021 to 11.08m bbl/day, America’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 160,000bbl/day.

However, prices were pressured by the EIA on Wednesday cutting its 2021 global oil demand growth forecast with little change to its 2022 estimate.

“The latest wave of the coronavirus, the spread caused by the Delta variant, made investors cautious and pragmatic last month,” said Tamas Varga, oil analyst at London brokerage PVM Oil Associates. “This pessimism has been reflected in the latest Short-Term Energy Outlook released by the EIA yesterday [Wednesday] afternoon.”

Also weighing on sentiment, the Federal Reserve cut its forecast for US GDP growth this year owing to the resurgence of Covid-19.

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

Reuters

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