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Crude Oil Slips From Seven-Week Highs; Supply Constrained

CommoditiesSep 17, 2021 09:23AM ET
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© Reuters

By Peter Nurse   

Investing.com -- Oil prices edged lower Friday, but are heading for a fourth consecutive weekly gain as supply in the important U.S. Gulf of Mexico region is only slowly returning to normal after Hurricane Ida.

By 9:25 AM ET (1325), U.S. crude futures were down 1.1% at $71.75 a barrel, while Brent futures were down 0.8% at $75.07 a barrel, pulling back from seven-week highs.

Both benchmarks are heading for weekly gains of well over 3%, the fourth consecutive positive week, the best run since early July.

U.S. Gasoline RBOB Futures were down 0.8% at $2.1645 a gallon.

Oil has surged of late as global consumption continues to recover from the pandemic, while a couple of hurricanes, Ida in particular, have affected production in the crucial U.S. Gulf of Mexico region, offsetting the production of additional barrels from the Organization of the Petroleum Exporting Countries and its allies.

As of Thursday, about 28% of Gulf crude production - over 510,000 barrels a day - still remained offline, more than two weeks after Hurricane Ida hit.

The effect of this extreme weather was illustrated by Wednesday’s Energy Information Administration data, which showed U.S. crude inventories dropped by more than 6 million barrels last week to a two-year low.

“This situation shows that we have a very tight supply versus demand situation because the supplies are not coming back online fast enough. We’re probably going to see a continued price squeeze,” said Phil Flynn, an analyst at Price Group, in a note.

Turning away from supply, both the International Energy Agency and OPEC this week raised their forecasts for oil demand in 2022, seeing increasing vaccination around the globe decreasing the impact of the Covid-19 virus.

The CFTC’s speculative net positioning data and Baker Hughes’ oil rig count round off the week later.

 

Crude Oil Slips From Seven-Week Highs; Supply Constrained
 

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Comments (4)
Aijan Canoy
Aijan Canoy Sep 17, 2021 1:38PM ET
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yif USA remove sanctions of sales of oil the price of oil is drop
Aijan Canoy
Aijan Canoy Sep 17, 2021 1:37PM ET
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yes it's good
مصطفی محمدابادی
مصطفی محمدابادی Sep 17, 2021 11:05AM ET
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what?
Nader Fard
Nader Fard Sep 17, 2021 10:52AM ET
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If USA remove santions of the sales of oil, then price of oil will drop substantially!
 
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