Oil prices sustain upward trajectory in a second straight session of gains

Oil prices climbed on Monday to a one-week high in a second straight session of gains as concerns over U.S. supplies following damage from Hurricane Ida supported the market, along with expectations for higher demand.

Brent crude rose 48 cents, or 0.7 per cent to $73.40 a barrel, and U.S. West Texas Intermediate (WTI) crude also added 49 cents, or 0.7 per cent to $70.21 a barrel. Both markets were at their highest since September 3 earlier in the session.

About three-quarters of the U.S. Gulf’s offshore oil production, or about 1.4 million barrels per day, has remained halted since late August which is roughly equal to what Nigeria produces.

“To compound matters, more oil refineries in Louisiana have resumed operations, raising demand for crude oil,” ANZ analysts said in a note.

Shell, the largest oil producer in the U.S. Gulf of Mexico, on Thursday cancelled some export cargoes due to damage to offshore facilities from Hurricane Ida, signalling energy losses would continue for weeks.

However, the number of rigs in operation in the United States grew in the latest week, energy service provider Baker Hughes said, indicating production may rise in coming weeks.

Beyond the impact of Ida, market attention will focus this week on potential revisions to the oil demand outlook for 2022 from the Organization of the Petroleum Operating Countries (OPEC) and the International Energy Agency (IEA). OPEC will likely revise its forecast lower on Monday, two people familiar with the matter said.

Money managers raised their net long U.S. crude futures and options positions in the week to September 7, the U.S Commodity Futures Trading Commission, CFTC, said on Friday.

The speculator group raised its combined futures and options position in New York and London by 1,035 contracts to 279,610 during the period.