Samson: Oil is falling due to the capital of the power outage
31st August, 2021
Oil prices fell on Tuesday, as fears of power outages and flooding in Louisiana after Hurricane Ida will reduce demand for crude from refineries as global producers plan to increase production
US West Texas Intermediate crude futures were down 13 cents, or 0.19 percent, at $69.09 a barrel at 05:15 GMT, reversing most of Monday’s gains
Brent crude futures for October, due to expire on Tuesday, were down 17 cents, or 0.23%, at $73.24 a barrel, after rising nearly 1% on Monday. The possibility that an extended refinery outage would dampen oil demand affected prices
Hurricane Ida shutdown or reduced production at six Louisiana refineries that process 1.92 million barrels per day of crude, about 12% of US refining capacity
Utility officials said “catastrophic” damage to Louisiana’s power grid could last three weeks, slowing efforts to repair and restart power facilities
On the supply side, about 1.72 million barrels per day of oil production remained closed in the US side of the Gulf of Mexico as rigs were evacuated before the hurricane, and companies expect it will take days to get a full assessment of the potential damage
Limiting oil prices, on the other hand, is the possibility of the Organization of the Petroleum Exporting Countries (OPEC) and its allies, known as OPEC+, agreeing to press ahead with plans to add another 400,000 barrels of supply each month through December
Delegates say they expect to press ahead with increasing production, but Kuwait’s oil minister said on Sunday the plan could be reconsidered amid fears of an outbreak of COVID-19 infections in Asia limiting demand for the fuel LINK
