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Oil prices fall as storm-hit US supply trickles back into market

Oil prices fell on Friday as energy companies in the US Gulf of Mexico restarted production after back-to-back hurricanes in the region shut output

Topics
Oil Prices | US crude oil | Brent crude

Reuters  |  NEW YORK 

Crude Oil

By Stephanie Kelly

NEW YORK (Reuters) -fell on Friday as companies in the U.S. Gulf of Mexico restarted production after back-to-back hurricanes in the region shut output.

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 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 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. 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.

Fourteen offshore Gulf of Mexico rigs shut two weeks ago due to Ida remained shut, 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)

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

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First Published: Sat, September 18 2021. 02:13 IST
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