Crude oil inches lower as storm-hit US supply trickles back

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Crude oil inches lower as storm-hit US supply trickles back

On Friday, both US WTI (West Texas Intermediate) and UK crude oil futures’ prices edged lower after drilling rigs in the US Gulf of Mexico had resumed operation following back-to-back Hurricane Nicholas and Hurricane Ida, however, still a 28 per cent of entire US Gulf of Mexico’s operations remained shut-in.

Aside from that, an increase in US drilling rig counts to 512 from a prior nine as cited by US crude oil services provider Baker Hughes, had taken some shines off multi-month high crude oil contracts prices. On top of that, a weekend profit-taking wave following a week of robust gains in crude oil futures’ prices alongside a stronger American Dollar had eased a Herculean rally in crude oil futures’ prices.

More importantly, Friday’s tottering in crude oil futures’ market followed a five-straight-session of winning streak for UK crude, while on Wednesday, Brent crude had spiked to its highest level since late-July and US WTI crude oil contracts had jumped to its strongest since early-August.

As of Friday night, US Gulf of Mexico crude oil exports restarted again after Hurricane Ida, a category four storm that whacked out nearly 26 million barrels of offshore production.

Crude oil falls as supply gradually returns to market

Citing statistics, on Friday’s commodity market wind-down, UK crude fell 0.40 per cent to settle at $75.30 a barrel, while US WTI crude oil futures’ prices were faltered as much as 0.86 per cent to $71.89 per barrel.

Meanwhile, referring to a gradual recovery in US crude oil supplies, a Rystad Energy oil markets analyst, Nishant Bhushan said, “The reason oil prices 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”.