Oil holds steady on slow return of US supplies after Hurricane Ida
FILE PHOTO: Crude oil storage tanks are seen from above at the Cushing oil hub, in Cushing, Oklahoma, March 24, 2016. REUTERS/Nick Oxford
MELBOURNE: Oil prices were little changed on Wednesday following overnight losses from a stronger dollar and demand concerns, with a slow production restart in the US Gulf of Mexico providing some support.
US West Texas Intermediate (WTI) crude futures rose 11 cents, or 0.2 per cent, to US$68.46 a barrel at 0429 GMT, after sliding 1.4 per cent on Tuesday following the Labor Day holiday.
Brent crude futures fell 2 cents to US$71.67 a barrel after falling 0.7 per cent on Tuesday.
"The market is ... weighing up the impact of ongoing delays to the resumption of operations in the Gulf of Mexico," ANZ Research analysts said in a note.
Producers in the US Gulf of Mexico are still struggling to restart operations nine days after Hurricane Ida swept through the region with powerful winds and drenching rain.
About 79 per cent of US Gulf production remained offline on Tuesday, with 79 production platforms still unoccupied. About 17.5 million barrels of oil has been lost to the market so far.
The Gulf's offshore wells make up about 17 per cent of US output.
"Refinery operations appear to be making a quicker recovery," ING analysts said in a note.
Only about 1 million barrels per day of capacity was temporarily closed, down from a peak of more than 2 million bpd, ING said, citing the latest situation report from the Department of Energy.
"However, those refiners that have restarted are unlikely to be operating at full capacity at the moment," the note added.
Traders will be closely watching inventory data from the American Petroleum Institute industry group due on Wednesday and the US Energy Information Administration on Thursday for a clearer picture of the storm's impact on crude production and refinery output.
Analysts polled by Reuters expect, on average, that crude stocks fell by 3.8 million barrels in the week to Sep 3, and see gasoline stocks down by 3.6 million barrels and distillates down by 3 million barrels.
Oil prices fell on Tuesday in a widespread commodity selloff as the U.S. dollar jumped on worries that rising COVID-19 cases in the United States and Asia will potentially lead to slower growth.
(Reporting by Sonali Paul in Melbourne and Florence Tan in Singapore; Editing by Tom Hogue and Richard Pullin)
