The Energy Information Administration says the latest weekly data on crude stockpiles shows that, in the week ended September 10, crude stockpiles fell by 6.422 million barrels as refiners faced a squeeze in crude supply.
For the week ending September 10, a number of market experts had earlier anticipated that crude oil sales would decline by 3.544 million barrels. Crude draws hit a four-week low due to Ida-related disruptions during the week of September. 3.
Friday’s oil futures were lower, with prices easing back from their highest levels since late July. As a result of the run-up earlier in the week, Friday’s selloff is mainly driven by profit-taking.
With the resultant of Tropical Storm Nicholas and Hurricane Ida’s impacts in the Gulf of Mexico, U.S. crude production remains sidelined in that part of the Gulf more than 30% of the time.
As a result, the outlook for global demand growth is deteriorating as the delta variant spreads. West Texas Intermediate crude for October delivery on the New York Mercantile Exchange fell 0.9%, to settle at nearly $72 a barrel. Overall, prices climbed 3.2% last week
US Gulf of Mexico production is gradually returning to full service – as of today, roughly a quarter of oil output remains halted – but expectations of continued US stock draws have weighed on the market sentiment and pushed Brent prices towards $75 per barrel.
Ida-triggered supply disruptions will only worsen the tight market in the coming weeks, as global demand slows down faster than supply, despite OPEC+ pushing more barrels into the market.
