By Barani Krishnan
Investing.com - Oil prices jumped 2% on Thursday on signs that the fallout from last weekend's Hurricane Ida might last longer than thought as the U.S. government reported that crude production facilities as well as refineries on the East coast were still mostly shuttered after the storm.
New York-traded West Texas Intermediate crude, the benchmark for U.S. oil, settled at $69.99 per barrel, up $1.40.
London-traded Brent, the global benchmark, meanwhile, settled at $73.01 per barrel, up $1.44.
Ida pummeled Louisiana as a Category 4 hurricane on Sunday, before turning into a tropical storm. Prior to its landfall, some 95% of the crude and natural gas facilities on the Gulf of Mexico had been shuttered as a precaution.
As of 12:30 PM ET (16:30 GMT) on Wednesday, about 80% of the oil production and 83% of the gas facilities remained shut, the U.S. Energy Department said.
It also said that some 1.2 million power outages persisted in the United States as of 7:00 AM on Thursday in the aftermath of the storm, which brought floods and other carnage to the U.S. East coast after making landfall.
“Crude oil processing will probably take considerably longer to recover from the outages than crude oil production, which suggests that crude oil stocks will increase in the coming weeks,” said Commerzbank (DE:CBKG) analyst Carsten Fritsch said.
Robert Yawger, director of energy futures at Mizuho, concurred with that view, saying: “There are good reasons for this rally - we have 1.5 mln barrels still offline in the Gulf, yesterday’s crude number was down 7.2 million barrels and storage was at its lowest level since September 2019.”