Oil prices were little changed on Wednesday following overnight losses from strong dollar and demand concerns as production slowly resumes in the US Gulf of Mexico.
Oil prices fell on Tuesday in a widespread commodity selloff as the U.S. dollar jumped on worries that rising COVID-19 cases in the United States and Asia will potentially lead to slower growth.
West Texas Intermediate (WTI) crude futures rose 11 cents, or 0.2%, to $68.46 a barrel at 0429 GMT, after sliding 1.4% on Tuesday following the Labor Day holiday.
Brent crude futures fell 2 cents to $71.67 a barrel after falling 0.7% on Tuesday.
The market is weighing the impact of continued delays in the Gulf of Mexico on the resumption of operations.
US Gulf of Mexico producers are still struggling to restart operations nine days after Hurricane Ida swept the region with strong winds and torrential rain.
About 79% of US Gulf production went offline Tuesday, with 79 production platforms still empty. So far, the market has been deprived of about 17.5 million barrels of oil.
The Gulf’s offshore wells account for about 17% of US production. Refinery operations seem to be making a faster recovery. However, restarted refineries are unlikely to operate at full capacity at this time.
Traders will be watching closely the inventory data from the American Petroleum Institute industry group on Wednesday and the U.S. Energy Information Administration on Thursday for a clearer picture of the storm’s impact on crude oil production and refinery production.
Analysts estimate that, on average, crude oil inventories fell 3.8 million barrels in the week through September 3, gasoline inventories fell 3.6 million barrels and distillate stocks fell 3 million barrels.
