The Delta variant continues to weigh on the demand recovery, offsetting a decline in U.S. Gulf of Mexico output in the aftermath of Hurricane Ida. With that, oil prices remained steady on Thursday.
By 0901 GMT, Brent crude added 4 cents to $72.64 a barrel. The West Texas Intermediate (WTI) crude lost 11 cents, or 0.16%, to $72.64.
On Tuesday, about 77% of U.S. Gulf production remained shut, equating to about 1.4 million barrels per day (bpd). So far, the market has lost about 17.5 million barrels of oil.
Moreover, the Gulf’s offshore wells consist of about 17% of U.S. output.
On Wednesday, the U.S. Energy Information Administration (EIA) said U.S. crude oil production is expected to fall by 200,000 bpd in 2021 to 11.08 million bpd. It also said that Hurricane Ida should force a bigger decline than its previous forecast for a drop of 160,000 bpd.
In a poll, American Petroleum Institute (API) data showed that crude drawdown for the week ended Sept. 3 was smaller than anticipated. But gasoline and distillate drawdowns were bigger than estimated.
U.S. EIA Cuts 2022 Global Oil Demand Outlook
On Wednesday, the U.S. EIA lowered its global oil demand estimate for 2022 by 240,000 b/d to 101.01 million b/d. It also lowered its 2021 estimate for global oil demand by 250,000 b/d to 97.38 million b/d in its September Short-Term Energy Outlook.
From an expected 2021 average of 11.08 million b/d, the agency trimmed its 2022 outlook for US oil production by 50,000 b/d to 11.72 million b/d.
Gold Down Near Two-Week Lows
On Thursday morning in Asia, gold was down remaining near two-week lows due to strengthening dollar Index Futures.
Moreover, investors were watching out for the European Central Bank (ECB)’s latest policy decision.
By 12:18 AM ET (4:18 AM GMT), gold futures were down 0.21% to $1,789.75. It previously hit its lowest level since Aug. 26 at $1,781.30. The dollar rose on Thursday.
The ECB will hand down its policy decision later in the day. It is widely expected to begin asset tapering while keeping support steady in the coming years.
Meanwhile, the Bank of Canada handed down its policy decision on Wednesday and kept its interest steady at 0.25%.