Oil prices rise as U.S. supply concerns dominate

A well head and drilling rig in the Yarakta oilfield, owned by Irkutsk Oil Company (INK), in the Irkutsk region, Russia, March 11, 2019. (Reuters)

SULAIMANI (ESTA) — Oil prices rose on Monday as concerns over U.S. output following damage from Hurricane Ida supported the market.

Brent crude climbed 64 cents to $73.56 a barrel as of 0646, and U.S. West Texas Intermediate (WTI) crude also added 64 cents to $70.36 per barrel.

Both markets were at their highest since September 3 earlier in the session.

About three-quarters of the offshore oil production in the U.S. Gulf of Mexico has remained halted since late August, roughly equal to what OPEC member Nigeria produces, according to Reuters.

“To compound matters, more oil refineries in Louisiana have resumed operations, raising demand for crude oil,” Reuters quoted ANZ analysts as saying.

U.S. refiners are coming back faster than oil production from the impact of Hurricane Ida, a reverse of past storm recoveries. Most of the nine Louisiana refineries impacted by the storm have resumed or were restarting on Friday.

Beyond the impact of Ida, market attention will focus this week on potential revisions to the oil demand outlook from OPEC and the International Energy Agency (IEA) as coronavirus cases continued to rise.

Reuters cited two people familiar with the matter as saying that OPEC would likely revise its 2022 forecast lower on Monday.

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