SINGAPORE- Oil prices climbed on Monday to a one-week high in a second straight session of gains as concerns over US supplies following damage from Hurricane Ida supported the market, along with expectations for higher demand.
Brent crude rose 48 cents, or 0.7 percent to $73.40 a barrel, and US West Texas Intermediate (WTI) crude also added 49 cents, or 0.7 percent, to $70.21 a barrel. Both markets were at their highest since Sept. 3 earlier in the session.
About three-quarters of the US Gulf’s offshore oil production, or about 1.4 million barrels per day, has remained halted since late August – roughly equal to what OPEC member Nigeria produces.
“To compound matters, more oil refineries in Louisiana have resumed operations, raising demand for crude oil,” ANZ analysts said in a note.
Royal Dutch Shell Plc, the largest oil producer in the US Gulf of Mexico, on Thursday cancelled some export cargoes due to damage to offshore facilities from Hurricane Ida, signaling 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 this week 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 will likely revise its forecast lower on Monday, two people familiar with the matter said.
Money managers raised their net long US crude futures and options positions in the week to Sept. 7, the US Commodity Futures Trading Commission (CFTC) said on Friday. The speculator group raise its combined futures and options position in New York and London by 1,035 contracts to 279,610 during the period.
Meanwhile, Saudi Aramco has notified at least five north Asian buyers that it will supply full contractual volumes of crude oil in October, sources with knowledge of the matter said on Monday.
The full allocation comes as the Organization of the Petroleum Exporting Countries and their allies including Russia agreed to ease supply cuts by 400,000 barrels per day each month between August and December.
“OPEC is still cutting by around 5 million bpd, but there seems to be plenty of oil from Saudi,” one of the sources said.
All sources spoke on condition of anonymity as they were not allowed to speak to the media.
Saudi Aramco was not immediately available for comment.
With rising supplies in view, Saudi Aramco has also slashed prices of all crude grades it sells to Asia in October by at least $1 a barrel to attract buyers.
