LONDON – Oil rose more than 1 percent on Monday, supported by concerns over production shutdowns in the United States due to damage from Hurricane Ida, with analysts expecting prices to remain stable in the market over the coming months.
Brent crude was up 90 cents, or 1.2 per cent, at $73.82 a barrel by 1049 GMT and US West Texas Intermediate (WTI) crude was up 99 cents, or 1.4 per cent, at $70.71.
Brent has been trading between $70 and $74 a barrel in the last three weeks.
“There may not be much room for oil prices to rise in the near term, but at the same time don’t expect a crash anytime soon,” said Stephen Brennock of broker PVM.
A US Energy Information Administration (EIA) said last week that it expects Brent prices to remain near current levels for the remainder of 2021, averaging $71 a barrel during the fourth quarter.
“Markets still need clarity on the effects of the virus beyond the very near term; And until we get to that, it looks like most assets, including oil, may continue to drift sideways,” said Howie Lee, an economist at OCBC Bank in Singapore.
Prices are still supported by the impact of Hurricane Ida on US production. About three-quarters of offshore oil production in the Gulf of Mexico, or about 1.4 million barrels per day, has been stalled since late August.
“Hurricane Ida was unique with a net bullish impact on the US and global oil balances — an impact on less demand than on production,” analysts at Goldman Sachs said in a note on September 9.
Although the number of rigs in operation in the United States rose in the latest week, energy services provider Baker Hughes said production could increase in the coming weeks.
The planned release of oil from China’s strategic stockpile poses a supply risk, while hopes of renewed talks between Iran and the West on a comprehensive nuclear deal were raised after the UN nuclear watchdog on Sunday agreed with Iran for surveillance equipment. An agreement was reached regarding overdue servicing. Keep it on
China said on Monday it would announce details of planned crude oil sales from strategic reserves in due course.
Bozorgmehr Sharafedin. By
This News Originally From – The Epoch Times