When American refineries are closed, 1% of oil is stored. Washington pushes for more investment in OPEC

© Reuters. FILE PHOTO: Oil drills recorded in Bakerfield Field, California in the Kern River oil field. November 9, 2014. REUTERS / Jonathan Alcorn / File Photo

By Laura Sanikola

NEW YORK (Reuters) – Oil prices are expected to fall after a month-long downturn after the first hurricane in the Gulf of Aden closed off US Gulf refineries.

The future, which ends Tuesday, is set at 42 cents or 0.6% on the $ 72.99 barrel.

West Texas Intermediate (WTI) raw futures are set at 71 cents or 1% at $ 68.50.

Although both standards are higher than July, they posted their first monthly losses since March. Brent lost 4% in July and dropped 7%.

Ida, a Category 4 hurricane, struck at least 94 percent of Mexico’s Gulf oil and gas production and caused “horrific” damage to the Louisiana grid.

Extreme levels of power outages and flooding have affected Louisiana after hurricanes cut off demand for grain.

1.7 million BPD has been shut down for offshore oil production, but if that power is lost it could start faster than many refineries in the Gulf. FGE analysts said in a statement Tuesday that they expect approximately three-quarters of overseas production to resume over the weekend.

OPEC and its affiliates in OPEC + have agreed to increase their monthly supply by 400,000 barrels (bpd) per month until the end of December. Sources told Reuters that the group was pushing for more US production, but was able to maintain that plan.

OPEC’s own data shows that the market will be weak until the end of 2021, but then it will turn into a profit in 2022.

“Changing the terms in a month’s time will damage OPEC’s credibility,” said Mizuho Energy Future Director Bob Yagger.

Colonial pipeline – the largest U.S. oil pipeline to the east coast – reopened its main gasoline and distribution lines on Tuesday after the storm closed, but some refineries are reporting damage to their plants.

Royal Dutch LON 🙂 Plc has received evidence of damage to buildings at 230,611 barrels per day (BDD) in Norco, Louisiana and a refinery, a company spokesman said on Tuesday.

Rebecca Babin, a major energy trader at CBC’s Treasury, said: Beyond that, we drive inventory levels very low and prices can respond significantly, ”he said.

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