NEW YORK: Oil prices fell on Friday as energy companies in the US Gulf of Mexico restarted production after back-to-back hurricanes in the region shut output.
Brent crude futures fell 33 cents to settle at $75.34 a barrel. US West Texas Intermediate (WTI) crude futures fell 64 cents to settle at $71.97 a barrel. For the week, Brent was up 3.3% and US crude was up 3.2%, supported by tight supplies due to the hurricane outages.
Friday’s slump followed five straight sessions of rises for Brent. On Wednesday, Brent hit its highest since late July, and US crude hit its highest since early August.
“The reason oil prices reached such highs in the last few days was clearly supply disruptions and drawdowns in inventories, so now that US oil production is returning, oil as expected trades lower,” said Nishant Bhushan, Rystad Energy’s oil markets analyst.
Gulf Coast crude oil exports are flowing again after hurricanes Nicholas and Ida took out 26 million barrels of offshore production. Restarts continued with about 28% of US Gulf of Mexico crude output offline, Reuters reported on Thursday.
US energy firms this week added oil and natural gas rigs for a second week in a row although the number of offshore units in the Gulf of Mexico remained unchanged after Hurricane Ida slammed into the coast over two weeks ago.
Fourteen offshore Gulf of Mexico rigs shut two weeks ago due to Ida remained shut, energy services firm Baker Hughes Co said. Last week, four offshore rigs returned to service.
The oil and gas rig count, an early indicator of future output, rose nine to 512 in the week to Sept. 17, its highest since April 2020, Baker Hughes said.
The dollar climbed to a multi-week high on Friday, making dollar-denominated crude more expensive for those using other currencies. The dollar got a boost from better-than-expected US retail sales data on Thursday.
US consumer sentiment steadied in early September after plunging the month before to its lowest level in nearly a decade, but consumers remain worried about inflation, a survey showed on Friday.