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Oil falls 1% on the day but hangs onto weekly gain. What’s next

WTI crude gives up gains to settle down 70-cents to $69.29

The fundamental story in oil this week is continued outages in the Gulf of Mexico. Generally, platforms come back online quickly after storms but that’s not the case after Ida.

There is still 1.7 million barrels per day offline and the cumulative loss is now 13 million barrels which is more than the entire cumulative OPEC+ hike this month (12 million barrels). Some of that is balanced out by 1.6 mbpd in refinery outages but it means a big drawdown on stockpiles of refined products this week.

The risk is that outages drag. Shell reported damage to WD-143 facilities in the Gulf of Mexico. That’s a waystation that could keep 300-400 k/bpd offline for a longer stretch.

Technically, the chart isn’t as good as it looked yesterday but the marginally positive close this week confirms the outside week reversal. I take that as a positive sign into next week, particularly if the US dollar stays under pressure and delta numbers continue to fall.

Meanwhile, natural gas continues to absolutely sizzle, finishing up another 6-cents to $4.70.

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