(Bloomberg) — Oil was steady above $69 a barrel as the slow return of US output halted by Hurricane Ida more than a week ago tightened the market.
Futures in New York advanced 1.4% on Wednesday after two straight days of declines. Just over 20% of US Gulf of Mexico oil and natural gas production is back online after the hurricane battered southeast Louisiana, marking an even slower comeback than in the wake of Katrina. Regional crude grades such as Mars Blend have jumped due to the prolonged shutdown.
See also: Russian Oil Shipments to the US Set to Surge in Ida’s Wake
Oil has whipsawed over the past couple of months amid mixed demand signals, including concerns about fuel consumption due to the delta variant of the virus leading to renewed restrictions on mobility. The outlook now looks to be improving, with the world’s two biggest economies — the US and China — seeing demand surpass pre-pandemic levels.
The prompt timespread for Brent was 78 cents a barrel in backwardation — a bullish structure where near-dated contracts are more expensive than later-dated ones — on Wednesday. That compares with 56 cents a week earlier.
The American Petroleum Institute reported US crude stockpiles dropped by 2.88 million barrels last week, according to people familiar with the data. Nationwide inventories are forecast to have slid by 4.75 million barrels, a Bloomberg survey showed before official Energy Information Administration figures later Thursday.
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