Oil falls as storm-hit U.S. supply trickles back into market
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[September 18, 2021] By
Stephanie Kelly
NEW YORK (Reuters) -Oil prices fell on
Friday as energy companies in the U.S. Gulf of Mexico restarted
production after back-to-back hurricanes in the region shut output.
Brent crude futures fell 33 cents to settle at $75.34 a barrel. U.S.
West Texas Intermediate (WTI) crude futures fell 64 cents to settle at
$71.97 a barrel. For the week, Brent was up 3.3% and U.S. crude was up
3.2%, supported by tight supplies due to the hurricane outages.
Friday's slump followed five straight sessions of rises for Brent. On
Wednesday, Brent hit its highest since late July, and U.S. crude hit its
highest since early August.
"The reason oil prices reached such highs in the last few days was
clearly supply disruptions and drawdowns in inventories, so now that
U.S. oil production is returning, oil as expected trades lower," said
Nishant Bhushan, Rystad Energy's oil markets analyst.
Gulf Coast crude oil exports are flowing again after hurricanes Nicholas
and Ida took out 26 million barrels of offshore production. Restarts
continued with about 28% of U.S. Gulf of Mexico crude output offline,
Reuters reported on Thursday.
U.S. energy firms this week added oil and natural gas rigs for a second
week in a row although the number of offshore units in the Gulf of
Mexico remained unchanged after Hurricane Ida slammed into the coast
over two weeks ago.
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A TORC Oil &
Gas pump jack is seen near Granum, Alberta, Canada May 6, 2020.
REUTERS/Todd Korol/File Photo
Fourteen offshore Gulf of Mexico rigs shut two weeks ago due to Ida remained
shut, energy services firm Baker Hughes Co said. Last week, four offshore rigs
returned to service.
The oil and gas rig count, an early indicator of future output, rose nine to 512
in the week to Sept. 17, its highest since April 2020, Baker Hughes said.
The dollar climbed to a multi-week high on Friday, making dollar-denominated
crude more expensive for those using other currencies. The dollar got a boost
from better-than-expected U.S. retail sales data on Thursday.
U.S. consumer sentiment steadied in early September after plunging the month
before to its lowest level in nearly a decade, but consumers remain worried
about inflation, a survey showed on Friday.
(Reporting by Stephanie Kelly in New York; additional reporting by Julia Payne
in London, Sonali Paul in Melbourne and Roslan Khasawneh in SingaporeEditing by
David Goodman, Louise Heavens and David Gregorio)
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