Oil Down but Moves Small as Gulf of Mexico Recovery from Ida Remains Slow By Investing.com

© Reuters.

By Gina Lee

Investing.com – Oil was down Friday morning in Asia. , however, even as more U.S. Gulf of Mexico supply returned online after two hurricanes. The black liquid was on track to post weekly gains of around 4%, with the output recovery viewed to be lagging behind demand.

rose 0.26% to $75.47 by 11:04 PM ET (3:04 AM GMT) and edged down 0.12% to $72.47.

Both Brent and WTI futures are to climb about 4% for the week, with Brent near a seven-week high and WTI near a six-week high. Output in the U.S. Gulf of Mexico has recovery much slower than expected after Hurricanes Ida and Nicholas hit in late August and during the past week respectively.

Around 28% of the region’s crude production remained offline as of Thursday, more than two weeks after Ida made landfall.

“It’s still taking longer than people thought in terms of that coming back. That’s been a supportive factor in the market. We’re going to go into more supply deficit conditions, that certainly seems to be the view,” Commonwealth Bank commodities analyst Vivek Dhar told Reuters.

U.S. crude exports in September slipped to between 2.34 million barrels per day (bpd) and 2.62 million bpd from 3 million bpd in late August, according to preliminary data from the U.S. Energy Information Administration.

Data from the International Energy Agency this week showed OECD oil inventories falling to a low in November, with the recovery in fuel demand expected to outpace supply, according to Dhar.

The risk of weaker demand in Southeast Asia has abated as COVID-19 cases appear to have peaked in countries such as Indonesia, Malaysia and Thailand, he added.

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