Oil prices fell on Friday (Sep 13) as US Gulf of Mexico crude production resumed following Hurricane Francine and rising data showed a weekly rise in US rig count.
Brent crude futures settled at US$71.61 a barrel, down 36 cents or 0.5 per cent. US West Texas Intermediate crude (WTI) settled at US$68.65 a barrel, down 32 cents or 0.5 per cent.
As US Gulf Coast production and refining activity resumes, investors have opted to offload oil contracts going into the weekend, said Bob Yawger, director of energy futures at Mizuho in New York.
“You could come back Monday and everything is fine – the refineries are running at 100 per cent, everyone is back on the platform, oil comes back and gasoline is coming out of the refinery – and the market could potentially pull back exponentially,” Yawger said.
For the week, oil futures finished higher following sharp storm-related increases early in the week, breaking a streak of declines. Brent logged an increase of about 0.8 per cent since the close of last Friday’s session, while WTI registered a roughly 1.4 per cent gain.
Official data showed that, as of Thursday, the storm nearly shut in 42 per cent of oil production in the region that accounts for about 15 per cent of US output.
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“These cuts are expected to prove brief and within the broader context are unlikely to spur much movement in the crude balances given the importance of shale production that accounts for the major portion of US output,” Ritterbusch said.
Crude prices also took a hit from the US rig count from energy services group Baker Hughes, which reported the biggest weekly rise in oil and natural gas rig in a year.
The oil and gas rig count rose by eight in the week to Sep 13 to 590, returning to mid-June levels. The increase was the biggest since the week to Sep 15, 2023. Crude oil rigs rose by five to 488 this week, while gas rigs rose by three to 97.
Also on the week, money managers cut their net long crude futures and options positions in New York and London by 27,493 contracts to 59,741 in the week to Sep 10, the US Commodity Futures Trading Commission said.
Both the Organization of the Petroleum Exporting Countries and the International Energy Agency lowered their demand growth forecasts this week, citing economic struggles in China, the world’s largest oil importer.
US oil stockpiles also rose across the board last week as crude imports grew and exports dipped, while fuel demand weakened, the Energy Information Administration said on Wednesday.
Investors are looking ahead now to the US Federal Reserve’s two-day policy meeting next week. It is widely expected to cut interest rates on Wednesday. REUTERS
