Oil prices showing no clear trend

28 Sep 2022 , 07:41 AM

Early Asian trading on Wednesday saw mixed results for oil prices as support from Hurricane Ian-related U.S. production curbs competed with rising crude storage levels and a strong dollar.

Brent crude futures decreased by 4 cents, or 0.1%, to $86.23 per barrel, while West Texas Intermediate (WTI) crude futures increased by 22 cents to $78.03 per barrel.

After halting production in advance of Hurricane Ian, which made landfall in the U.S. Gulf of Mexico on Tuesday and is anticipated to intensify into a deadly Category 4 storm over the Gulf’s warm waters, producers have started sending personnel back to offshore oil platforms.

The Gulf of Mexico’s oil production was reduced by 11%, or around 190,000 barrels per day, according to offshore regulator the Bureau of Safety and Environmental Enforcement (BSEE). Nearly 9% of daily output, or 184 million cubic feet, of natural gas, was lost by the producers. The BSEE said that 14 production platforms and rigs had personnel evacuated.

The U.S. Gulf of Mexico, which produces roughly 15% of the country’s crude oil and 5% of its dry natural gas, has not yet experienced a hurricane this year that has disrupted oil and gas production there.

The U.S. dollar-controlled oil prices. The dollar, which normally moves counter to the price of oil, stayed close to a 20-year high.

U.S. oil stockpile estimates also conveyed conflicting information about oil prices.

According to news reports on Tuesday that cited data from the American Petroleum Institute, while the amount of U.S. crude oil in storage increased by roughly 4.2 million barrels for the week ending September 23, gasoline stocks decreased by about 1 million barrels.

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