Oil eases on resuming US output after storm, rising rig count
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[September 14, 2024] By
Laila Kearney
NEW YORK (Reuters) -Oil prices fell on Friday as U.S. Gulf of Mexico
crude production resumed following Hurricane Francine and rising data
showed a weekly rise in U.S. rig count.
Brent crude futures settled at $71.61 a barrel, down 36 cents, or 0.5%.
U.S. West Texas Intermediate crude (WTI) settled at $68.65 a barrel,
down 32 cents, or 0.5%.
As U.S. Gulf Coast production and refining activity resumes, investors
have opted to offload oil contracts going into the weekend, said Bob
Yawger, director of energy futures at Mizuho in New York.
"You could come back Monday and everything is fine - the refineries are
running at 100%, everyone is back on the platform, oil comes back and
gasoline is coming out of the refinery - and the market could
potentially pull back exponentially," Yawger said.
For the week, oil futures finished higher following sharp storm-related
increases early in the week, breaking a streak of declines. Brent logged
an increase of about 0.8% since the close of last Friday's session,
while WTI registered a roughly 1.4% gain.
Official data showed that, as of Thursday, the storm nearly shut in 42%
of oil production in the region that accounts for about 15% of U.S.
output.
"These cuts are expected to prove brief and within the broader context
are unlikely to spur much movement in the crude balances given the
importance of shale production that accounts for the major portion of
U.S. output," Ritterbusch said.
Crude prices also took a hit from the U.S. rig count from energy
services group Baker Hughes, which reported the biggest weekly rise in
oil and natural gas rig in a year. [RIG/U]
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An oil pumpjack is pictured in a farmer’s field near Kindersley,
Saskatchewan, Canada September 5, 2024. REUTERS/Todd Korol/File
Photo
The oil and gas rig count rose by eight in the week to Sept. 13 to
590, returning to mid-June levels. The increase was the biggest
since the week to Sept. 15, 2023.. Crude oil rigs rose by five to
488 this week, while gas rigs rose by three to 97.
Also on the week, money managers cut their net long crude futures
and options positions in New York and London by 27,493 contracts to
59,741 in the week to Sept. 10, the U.S. Commodity Futures Trading
Commission said.
Both the Organization of the Petroleum Exporting Countries and the
International Energy Agency lowered their demand growth forecasts
this week, citing economic struggles in China, the world's largest
oil importer.
U.S. oil stockpiles also rose across the board last week as crude
imports grew and exports dipped, while fuel demand weakened, the
Energy Information Administration said on Wednesday.
Investors are looking ahead now to the U.S. Federal Reserve's
two-day policy meeting next week. It is widely expected to cut
interest rates on Wednesday.
(Reporting by Laila Kearney; Additional reporting by Arunima Kumar
in Bengaluru, Trixie Yap in Singapore and Shariq Khan in New York;
Editing by Paul Simao, Marguerita Choy, David Gregorio and Jonathan
Oatis)
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