Crude Oil Lower; Handing Back Some Hurricane Ida-Induced Gains

By Peter Nurse

Investing.com — Oil prices weakened Thursday, handing back some of the recent sharp gains and weighed by signs of a slowdown in the U.S. labor market recovery.

By 9:30 AM ET (1330 GMT), futures were down 0.3% at $72.41 a barrel, while Brent futures were down 0.3% at $75.24 a barrel.

U.S. Gasoline RBOB Futures were down 0.8% at $2.1900 a gallon.

increased to 332,000 in the week ended Sept. 11, data released Thursday showed, suggesting that the recovery in the labor market remains fragile with the continued spread of the delta variant potentially posing a threat.

That said, the market is only marginally below Wednesday’s highs, which were the strongest levels since early August, after U.S. crude inventories dropped by more than 6 million barrels last week to a two-year low, with offshore oil facilities still recovering from the impact of Hurricane Ida.

About 30% of the Gulf of Mexico’s production remained shut as of Wednesday, according to the Bureau of Safety and Environmental Enforcement.

Oil is also finding support from a surge in European power prices, which have soared because of factors including low gas inventories and lower than normal gas supply from Russia.

Commerzbank (DE:) sees ending 2021 at $75 a barrel, falling modestly to $70 a barrel in 2022, with the market facing a potential oversupply next year if the Organization of the Petroleum Exporting Countries and its allies, a group known as OPEC+, sticks to its current production plans.

OPEC+ agreed earlier this month to continue gradually increasing its output to the global market, reviving another 400,000 barrels a day of idle capacity this month.

On the flip side, there could be additional supply hitting the market in the near future after Libya’s state-owned oil firm, the National Oil Corporation, stated that protests at the Es Sider and Ras Lanuf oil terminals in eastern Libya have ended, allowing the country’s crude export operations to return to normal.