Oil production snag eases with prices decline
Between September 20 and 22, crude oil prices were dropping after production problems caused by Hurricane Ida in the Gulf of Mexico were solved.
At the beginning of the previous week, the energy market was bearish. The recovery in oil production has been sluggish since Hurricane Ida hit the Gulf of Mexico. Brent crude oil futures for delivery in November fell by 0.76% to $74.77 per barrel. At the same time, WTI futures for delivery in October dropped by 0.88% to $71.17 per barrel.
Rystad Energy analysts reported that oil production contracted by 850,000 barrels per day shortly after the hurriсane. Notably, a similar drop was observed in the week between September 13 and 19. Production is estimated to fall by 180,000-200,000 barrels per day at the end of the month. The reduction in supply chain disruptions was due to COVID-19 outbreaks in oil-importing countries – China and Japan. These countries are likely to hinder the recovery of demand for commodities, Rystad Energy stated.