Oil prices increased on Wednesday with supplies in the US Gulf of Mexico having still not recovered in the aftermath of Hurricane Ida, but demand worries limited further price upticks with the end of the summer driving season approaching.
International benchmark Brent crude was trading at $72.13 per barrel at 0656 GMT for a 0.61% gain after closing Tuesday at $71.69 a barrel.
American benchmark West Texas Intermediate (WTI) traded at $68.86 a barrel at the same time with a 0.74% decrease after ending the previous session at $68.35 per barrel.
Oil prices started the week on a bearish sentiment after Saudi Arabia’s decision to trim the prices of Arab Light crude for its Asian customers by $1.30. However, oil platform operations in the Gulf of Mexico have not been fully restored after Hurricane Ida, considered the worst storm in the last 16 years, hit the region.
According to the US Bureau of Safety and Environmental Enforcement, 79.3% of the current oil production and 77.9% of the natural gas production in the Gulf of Mexico have been shut in.
“For now, the Asian market is in a “semi-bullish mode” while awaiting new clues on the recovery of US production and refinery activity after the hit of Hurricane Ida,” according to Rystad Energy’s Head of Oil Markets Bjornar Tonhaugen.
Experts also concur that gas consumption will slow down when the US driving season ends to weigh on prices amid virus-induced demand worries.
Investors are now keeping tabs on the inventory data forecast of the American Petroleum Institute (API) later on Wednesday and data of the US Energy Information Administration (EIA) on Thursday.
By Sibel Morrow