Oil Mixed, Moves Small as Supply Recovery Post-Ida Remains Slow

Oil was mixed Wednesday morning in Asia. The black liquid clawed back some losses from the previous session as producers in the U.S.’ Gulf of Mexico struggle to re-start operations more than a week after Hurricane Ida hit the region.

Brent oil futures inched down 0.11% to $71.61 by 11:28 PM ET (3:278AM GMT) while WTI futures inched up 0.06% to $68.39.

“The market is … weighing up the impact of ongoing delays to the resumption of operations in the Gulf of Mexico,” ANZ Research analysts said in a note.

As of Tuesday, around 79% of production in the Gulf of Mexico was still offline and 79 production platforms remain unoccupied. The market has reportedly lost around 17.5 million barrels of oil to date, with the region accounting for around 17% of the U.S. output.

Investors now await U.S. crude oil supply data from the American Petroleum Institute, due later in the day. The data is expected to provide a clearer picture of Ida’s impact on crude production and refinery output.

On the fuel demand side, the spread of COVID-19’s Delta variant continues to cloud the outlook and halted oil’s recent rally.

China, the world’s largest oil importer, has seemingly curbed its latest outbreak and the market is expected to tighten through the end of 2021.

However, the number of daily COVID-19 cases reached a one-year high in Singapore and the city could re-impose restrictive measures. The Philippines has also paused easing curbs in the capital region. The U.S. death toll also topped 650,000 as of Sep. 8, according to Johns Hopkins University data.