On Wednesday, both US WTI (West Texas Intermediate) and UK crude oil futures’ prices gained ground, snapping a three-session long losing streak, as more than a three-quarter of US Gulf of Mexico output remained shut as of Wednesday over fallouts of Hurricane Ida.
In point of fact, in the day’s steep downward spiral in crude oil futures’ prices came forth as a raft of heavy-weight oil producers in the Gulf of Mexico had still been scuffling to resume operations as a repercussion of Hurricane Ida, which had swaggered the region with powerful storms and heavy rains nine days ago, eventually stepping up the likelihoods of a plausible supply-crunch for an unforeseeable period.
As of the day’s closure, roughly 77 per cent or three-fourth of the region’s output remained offline with 1.4 million bpd (barrels per day) of crude having been lost each day. According to data from BSEE (Bureau of Safety and Environmental Enforcement), at least 70 drilling rigs of 288 evacuated before the storm still remained unoccupied, while Occidental said in a statement that 7 of its 10 offshore drilling rigs stayed shut-in since Hurricane Ida and Royal Dutch Shell executives were quoted saying that they were still vying to determine the extent of damage.
Aside from that, a US EIA (Energy Information Agency) forecast revealed on Wednesday that it was expecting an additional plunge of 200,000 bpd in US crude outputs in 2021, totalling the loss at 11.08 million bpd or roughly 11 per cent of the world’s entire crude production, adding to further bullish breeze.
On top of that, crude oil prices also had been backed by a protest in Libya that blocked oil exports at Ras Lanuf and Es Sider.
Oil jumps as 77% of US Gulf production still offline
Citing statistics, in the day’s commodity market wind-down, US WTI crude oil futures’ prices gained as much 1.4 per cent to $69.33 a barrel, while Brent crude contracts settled 1.3 per cent higher to $72.66 per barrel.
Meanwhile, addressing to a sharp shoot-up in US refineries’ activities, a director of energy futures at Mizuho, Bob Yawger said, “It's possible the loss of refining demand and the amount of crude oil might somewhat cancel itself out”.