Protests in Libya, Hurricane Ida support oil rally

Oil prices rebounded early on Wednesday, rising by more than 1 percent, as nearly 80 percent of the total crude oil production in the U.S. Gulf of Mexico remains shut-in more than a week after Hurricane Ida made landfall in Louisiana. As of 8:07 a.m. EDT, the prompt price of the U.S. benchmark, WTI Crude, traded above $69 per barrel, at $69.24, up 1.43% on the day. The price of Brent Crude was $72.48, up by 1.21%, Oil Price writes.

Oil was also supported by reports in recent hours that protests at various key Libyan oil terminals have disrupted loadings on tankers or the entire oil export operations. Protesters at the Es Sider terminal have derailed the loading of a Suezmax tanker, Yannis P, sources familiar with the situation told Bloomberg on Wednesday. According to oil engineers at the oil ports of Es Sider and Hariga who spoke to Reuters, protesters blocked exports at those ports. Three tankers are waiting to load at Es Sider and one at Hariga, according to Reuters’ sources.

At the same time, the slow resumption of U.S. Gulf of Mexico’s crude oil production after Hurricane Ida also supported oil prices. As of Tuesday, a total of 1.44 million barrels per day (bpd) of oil production was still shut-in, equal to 79.33 percent of all U.S. Gulf of Mexico production, data from the Bureau of Safety and Environmental Enforcement (BSEE) showed.

Also as of Tuesday, five refineries in Louisiana remain shut, accounting for about 1.0 million bpd of refinery capacity, or 6 percent of the total U.S. operable refining capacity, the Department of Energy said in its latest update.

“So far Hurricane Ida has resulted in 19.2MMbbls of production being lost, and with output still set to take a while to recover, these losses will only grow. Refinery operations appear to be making a quicker recovery,” ING strategists Warren Patterson and Wenyu Yao said early on Wednesday.