Oil prices slipped on Tuesday amid concerns that power outages and flooding in Louisiana after Hurricane Ida will cut crude demand from refineries at the same time global producers plan to raise output.
The prices were also weighed down by weaker manufacturing data from China, where factory activity expanded at a slower pace in August compared with the previous month.U.S. West Texas Intermediate crude futures were down 9 cents, or 0.13%, at $69.12 a barrel as of 0640 GMT, reversing some of Monday's gains.
"The oil market is in a wait and watch mode as both demand- supply impact of Hurricane Ida is assessed," said Ravindra Rao, vice president, commodities at Kotak Securities.Hurricane Ida knocked out at least 94% of the offshore Gulf of Mexico oil and gas production and caused "catastrophic" damage to Louisiana's grid.
With "catastrophic" damage to the grid in Louisiana, power outages could last three weeks, utility officials said, which would slow efforts to repair and restart energy facilities.On the supply side, about 1.72 million bpd of oil production and 2.01 million cubic feet per day of natural gas output remained offline in the U.S. side of the Gulf of Mexico following evacuations at 288 platforms.
"Brent crude between $70 and $75 a barrel seems to be the grouping's sweet spot, and with the futures curve in backwardation, demand remains robust despite the short-term noise," said Jeffrey Halley, senior market analyst at OANDA.
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