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Oil Down but Moves Small as Gulf of Mexico Recovery from Ida Remains Slow By


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By Gina Lee – Oil was down Friday morning in Asia. However, the oil price fell despite more U.S. Gulf of Mexico production coming online following two hurricanes. Black liquid posted weekly gains around 4% with output recovering behind demand.

rose 0.26% to $75.47 by 11:04 PM ET (3:04 AM GMT) and edged down 0.12% to $72.47.

Brent and WTI Futures both are expected to rise around 4% over the coming week. Brent close to an all-time high of $72.47 by 11:04 PM ET (3:04 AM GMT) and WTI at a near-all-time high of $62.47. After Hurricanes Ida, and Nicholas in August, the U.S. Gulf of Mexico’s output has been recovering much more slowly than anticipated.

Around 28% of the region’s crude production remained offline as of Thursday, more than two weeks after Ida made landfall.

In terms of the coming back, it’s still taking longer that people expected. It’s been a supporting factor in the market. We’re going to go into more supply deficit conditions, that certainly seems to be the view,” Commonwealth Bank commodities analyst Vivek Dhar told Reuters.

According to preliminary U.S. Energy Information Administration data, crude oil exports to the United States dropped to 2.34 million barrels per daily (bpd), and 2.62million bpd respectively in September. This is down from 3 million bpd late in August.

According to Dhar, data from the International Energy Agency showed that OECD oil inventories fell to a low level in November. The recovery in fuel demand is expected to exceed supply.

As COVID-19 cases have peaked, the threat of weaker Southeast Asia demand has diminished, Dhar said.

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