Futures climbed toward $69 a barrel in New York. Almost 80% of U.S. Gulf of Mexico oil production remained shut in on Tuesday. The resulting disruption has seen the value of regional oil grades like Mars Blend jump to their highest level since January, according to data compiled by Bloomberg.
“Oil prices are continuing to find support from the ongoing high production outages in the Gulf of Mexico,” said Carsten Fritsch, an analyst at Commerzbank AG. “Because of this outage on the supply side, the global oil market is likely to be more under-supplied in the short term than previously anticipated.”
While there are pockets of robust demand emerging in some regions including Europe, the fast-spreading delta variant of the virus has resulted in renewed lockdowns in other areas. China, the world’s largest oil importer, has managed to contain its outbreak of the variant, and there are expectations that the market will tighten through the end of the year.
Covid-19 infections jumped to a one-year high in Singapore, and the city-state isn’t ruling out re-imposing restrictions. The Philippines has backtracked on easing curbs in the capital region. In the U.S., the death toll topped 650,000, although three-quarters of adults have now taken at least one vaccine dose.
The market will get a snapshot on Thursday of Hurricane Ida’s impact on U.S. stockpiles. Gasoline inventories probably slid by about 3.7 million barrels last week, according to a Bloomberg survey. That would be the biggest change in five weeks if confirmed by official data. Crude supplies are expected to fall by 6 million barrels.
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