Oil prices firm as U.S. output struggles after storm

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[September 09, 2021]  By Noah Browning

LONDON (Reuters) -Oil prices rose on Thursday as U.S. crude output remained largely offline after Hurricane Ida, though gains were capped by a clouded outlook for demand recovery owing to the spread of the Delta variant of the coronavirus.

Brent crude rose 59 cents, or 0.8%, to $73.19 a barrel by 1110 GMT and West Texas Intermediate (WTI) crude was up 54 cents, or 0.8%, at $69.84.

About 77% of U.S. Gulf oil production had yet to resume on Tuesday, equating to about 1.4 million barrels per day (bpd). The market has lost about 17.5 million barrels of oil so far.

The Gulf's offshore wells account for about 17% of U.S. output.

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

U.S. crude oil production is expected to fall by 200,000 bpd in 2021 to 11.08 million bpd, the U.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 160,000 bpd.

"Crude Oil remains rangebound, with support being provided by a very slow return of U.S. production halted by Hurricane Ida and API data pointing to another price-supportive weekly drop in U.S. oil and fuel stocks," Saxo Banks analysts said in a note.

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

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

(Additional reporting by Naveen ThukralEditing by David Goodman)

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