Oil drops as storm-hit US supply return to market
Oil prices fell on Friday as US energy companies in the Gulf of Mexico resumed production after successive hurricanes in the region halted production.
Brent crude futures fell 33 cents to $75.34 a barrel. West Texas Intermediate (WTI) crude futures fell 64 cents to settle at $71.97 a barrel.
Oil prices gained more than 3% weekly. The slow recovery in production after Ida supported prices last week. For the week, Brent was up 3.3% and US crude was up 3.2%, supported by tight supplies amid hurricane cuts.
Friday's drop came after five straight sessions of gains for Brent. On Wednesday, Brent and US crude hit their highest level since early August.
The reason why oil prices have been so high in the last few days is clearly supply disruptions and drops in inventories. US oil production, which wants to get its share from the market balances, is trying to return quickly.
Gulf coast crude exports are flowing again after hurricanes Nicholas and Ida blocked 26 million barrels of offshore production. About 28% of US Gulf of Mexico crude oil production continued offline during resumption of production, according to Thursday's reports.
U.S. energy companies added oil and gas rigs for the second week in a row this week, while the number of offshore units in the Gulf of Mexico remained unchanged after Hurricane Ida hit the coast two weeks ago.
Energy services firm Baker Hughes Co. said fourteen offshore drilling rigs in the Gulf of Mexico were closed due to Ida two weeks ago. Last week, four offshore rigs returned to service.
The number of oil and gas rigs, an early indicator of future production, rose nine to 512 in the week to September 17, its highest level since April 2020, according to Baker Hughes.
The dollar climbed to a multi-week high on Friday, making dollar-denominated crude more expensive for those using other currencies. The dollar was supported by better-than-expected US retail sales data on Thursday.
U.S. consumer sentiment stabilized in early September after falling to nearly a decade low the previous month, but consumers remain worried about inflation, according to a survey on Friday.
Related Articles
Oil prices are rising as supply concerns increase amid expectations of a prolonged conflict in the Middle East
Oil prices continued to rise following US and Iranian attacks on ships serving their respective purposes
Oil prices closed higher this week following renewed US-Iran hostilities
