Oil heads for fourth straight weekly gain

Oil prices continued to fall as the US market opened on Friday, deepening losses for the second day and gave up a 6-week high on profit-taking, as fears over production delay in the Gulf of Mexico region eased, but remain on the cusp of the fourth straight weekly gain thanks to demand hopes in the US.

US crude fell 0.9% to $71.90 barrel, after opening at $72.53, and hit a high at $72.69, and Brent crude fell more than 0.8% to $75.04 a barrel, after opening at $75.62, and hit a high at $75.75.

The US crude lost 0.1% yesterday, the first daily loss in 5 days, on profit-taking from a 6-week high at $73.11, and Brent fell less than 0.1%, after hitting the highest since July 29 at $76.10.

After 2 weeks since Hurricane Ida and the Tropical Storm Nicholas hit the Gulf of Mexico this week, US production is recovering near its normal levels.

Production rose by 25% during the last few days, with the region’s total production rising to 75%, with 0.25% of production suspended but expected to resume after the weekend.

Gulf of Mexico encompasses 17% of the US total production, which was 11.5 million bpd before Hurricane Ida, and is currently around 11.1 million barrels per day.

The Energy Information Administration reported yesterday that the US crude inventories fell 6.4 million barrels, during the week ending September 10, while analysts forecasts a drop by 3.6 million barrels.

The total commercial inventories fell to the lowest level since the week ending on September 6, 2019 at 417.48 million barrels, in a positive sign of the US demand levels.