Oil prices fell Friday as crude production in the U.S. Gulf of Mexico resumed after Hurricane Francine and rising data showed a weekly increase in U.S. rig count.
Brent crude futures settled down 36 cents, or 0.5%, at $71.61 a barrel. WTI crude fell 32 cents, or 0.5%, at $68.65 a barrel.
As U.S. Gulf Coast production and refining activity resumed, investors chose to sell oil contracts heading into the weekend.
Things are likely to be back on track on Monday. Refineries are operating at 100%, platforms are back on, oil is coming back and gasoline is coming out of refineries, and the market could potentially pull back exponentially.
For the week, oil futures closed higher after sharp storm-induced increases earlier in the week, breaking a series of declines.
Brent has gained about 0.8% since the close of last Friday’s session, while WTI has gained about 1.4%.
Official data showed that the storm had shut down almost 42% of oil production in the region, which accounts for about 15% of U.S. production, as of Thursday.
These disruptions are expected to be short-lived and are unlikely to move crude balances much in the broader context, given the importance of shale production, which accounts for a large portion of U.S. production.
Crude oil prices were also hit by the biggest weekly oil and U.S. rig count in a year.
The oil and gas rig count rose by eight to 590 in the week to September 13, returning to mid-June levels. The increase was the biggest since the week to September 15, 2023. Crude rigs rose five this week to 488, while gas rigs rose three to 97.
Money managers in New York and London also reduced their net long crude futures and options positions by 27,493 contracts in the week to Sept. 10, the U.S. Commodity Futures Trading Commission said.
Both OPEC and the International Energy Agency (IEA) lowered their demand growth forecasts this week, citing economic woes in China, the world’s largest oil importer.
U.S. oil inventories also rose overall last week as crude imports rose, exports fell and fuel demand weakened, the Energy Information Administration (EIA) said in a statement.
Investors are awaiting a two-day U.S. Federal Reserve policy meeting next week, which is expected to cut interest rates on Wednesday.
