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Market News Oil production hit a new high in more than two and a half months, and the Gulf of Mexico will resume production in full or be delayed until early next year

Oil production hit a new high in more than two and a half months, and the Gulf of Mexico will resume production in full or be delayed until early next year

On September 24, international oil prices rose steadily. ICE Brent crude oil hit a new high since July 6 to US$76.94/barrel, and NYMEX crude oil hit a new high since August 6 to US$73.66/barrel, both of which are expected to record for the third consecutive week. Gain weekly gains. Support is provided by global output disruptions and lower inventories. The largest crude oil producer in the U.S. Gulf of Mexico, Royal Dutch Shell, said this week that the supply of crude oil in the Gulf of Mexico will be restricted until the beginning of next year due to the damage to offshore transshipment facilities caused by Hurricane Ida.

LEO
2021-09-24
10213

On Friday (September 24), international oil prices rose steadily. ICE Brent crude oil hit a new high since July 6 to $76.94/barrel, and NYMEX crude oil hit a new high since August 6 to $73.66/barrel, both of which are expected to continue. Weekly gains were recorded in the third week. Support is provided by global output disruptions and lower inventories.

GMT+8 17:03, NYMEX crude oil futures rose 0.25% to $73.48/barrel; ICE Brent crude oil futures rose 0.39% to $76.76/barrel.


In recent weeks, crude oil production in the U.S. Gulf of Mexico has been severely disrupted by hurricane disasters. The interruption of production on some operating platforms may last for several months, leading to a sharp drop in U.S. and global inventories. Due to insufficient investment during the COVID-19 pandemic and delays in maintenance work, the Organization of Petroleum Exporting Countries and its allies (OPEC+) also bumped their way to increase production. Oil prices are therefore supported.

Data released by the U.S. Energy Information Administration (EIA) earlier this week showed that U.S. crude oil inventories fell to the lowest level in nearly three years last week. Analysts and traders said that US refiners have turned to countries such as Iraq and Canada to look for alternatives to Gulf of Mexico crude oil.

In 2019, when the United States imposed sanctions on Venezuela and cut off the supply of heavy crude oil to the Gulf of Mexico refinery, Canadian heavy oil suppliers benefited from this. Iraqi Basra crude oil came to the fore. The two rapidly increased their shipments.

The largest crude oil producer in the U.S. Gulf of Mexico, Royal Dutch Shell, said this week that the supply of sour crude oil from Mars will be restricted until the beginning of next year due to the damage to offshore transshipment facilities caused by Hurricane Ida. Exxon Mobil and Placid Refining Co have obtained oil from the US Strategic Petroleum Reserve (SPR) to meet the urgent demand for sour crude oil.

A US crude oil trader said: "The refineries that need to replace Martian crude oil require SPR to provide sour crude oil. Many other refineries are purchasing additional Basra crude oil cargoes for delivery in October. The price is very convenient because of the sour crude oil. Under pressure on the whole."

Another trader said that Marathon Petroleum Company (MPC.N) has purchased Basra crude oil for delivery in October. Data from Refinitiv Eikon shows that the Suez tanker Jag Leena is temporarily scheduled to load 1 million barrels of Basra light crude oil for the United States on October 10, but it is not clear which company leased the ship.

UBS analysts said in a report that due to reduced inventories, reduced OPEC production and strong demand in the Middle East, the price of Brent crude oil may reach $80 per barrel at the end of September. "The reason why oil prices may be pushed up to this level is that, Unplanned supply interruptions have led to continued decline in oil inventories."

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