Oil surges over Ida damages, US supply concerns

Photo: AP

Oil prices started the week surging to new highs over concerns linked to supplies to US customers. The market takes in account damages caused from Hurricane Ida coupled with higher demand, Reuters reported. Brent crude rose to $73.40 a barrel, and US West Texas Intermediate crude was up to $70.21 a barrel. Both markets were at their highest since 3 September.

About 75% of the US Gulf's offshore oil production, or about 1.4 million barrels per day, has remained halted since late August.

Royal Dutch Shell, the largest oil producer in the US Gulf of Mexico, cancelled some export cargoes due to damage to offshore facilities from Hurricane Ida, signalling energy losses would continue for weeks. However, the number of rigs in operation in the United States grew in the latest week, energy service provider Baker Hughes said, indicating production may rise in coming weeks. Beyond the impact of Ida, market attention will focus on potential revisions to the oil demand outlook for 2022 from the Organization of the Petroleum Operating Countries (OPEC) and the International Energy Agency (IEA). OPEC is expected to revise its output forecast to lower levels.

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