SULAIMANI (ESTA) — Oil prices fell on Tuesday amid concerns that power outages and flooding in Louisiana after Hurricane Ida will cut crude demand from refineries at the same time global producers plan to raise output.
Brent crude futures fell 7 cents to $73.34 a barrel as of 0715 GMT, after gaining nearly 1% on Monday.
U.S. West Texas Intermediate (WTI) crude futures were 11 cents at $69.10 per barrel, reversing some of Monday’s gains.
“The oil market is in a wait and watch mode as both demand-supply impact of Hurricane Ida is assessed,” Reuters quoted Ravindra Rao, vice president, commodities at Kotak Securities, as saying.
“Also, market players are on sidelines ahead of OPEC+ review meeting tomorrow.”
Reuters reported that Hurricane Ida knocked out at least 94% of the offshore Gulf of Mexico oil and gas production and caused “catastrophic” damage to Louisiana’s grid.
The loss of power could last three weeks, Reuters cited utilities officials as saying. It has slowed efforts to repair and restart energy facilities, which could also take at least two weeks to fully resume operations, the news agency said.
“With companies currently assessing damages, a current timeline for how long shuttered capacity will be down is still uncertain,” RBC analysts said in a note.
The prices were also weighed down by weaker manufacturing data from China, where factory activity expanded at a slower pace in August compared with the previous month.