Oil rises 2% from multi-month low on U.S. Gulf production cuts, supply outlook

  • BP begins to redeploy workers to offshore platforms
  • Iraq says OPEC is monitoring prices and seeking market balance
  • Coming soon: API supply report at 4:30 p.m. EDT, 2030 GMT

NEW YORK, Sept 27 (Reuters) – Oil rose around $2 a barrel on Tuesday from a nine-month low a day earlier, supported by supply restrictions in the U.S. Gulf of Mexico before Hurricane Ian and as the US dollar depreciated from its all time high. level in two decades.

Prices were supported by analysts’ expectations of possible supply cuts from the Organization of the Petroleum Exporting and Allied Countries (OPEC+), which is due to meet to set policy on Oct. 5.

Brent crude stood at $86.27 a barrel, up $2.21, or 2.6% On Monday, it fell to $83.65, the lowest since January. U.S. West Texas Intermediate (WTI) crude settled at $78.50, up $1.79 or 2%.

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U.S. offshore oil producers said they were monitoring the path of Hurricane Ian as the powerful storm stalled about 11% of oil production in the U.S. Gulf of Mexico as it headed toward Florida.

The outages can only provide a momentary reprieve for oil prices, said Bob Yawger of Mizuho in New York.

“Barrels will come back very soon, I imagine,” Yawger said, adding that there’s a small chance the storm will change course and force more closures.

After shutting down some of its offshore crude production, BP Plc (BP.L) said the storm posed no threat to its assets in the Gulf of Mexico and was redeploying workers to oil rigs . Read more

Crude prices had soared after Russia invaded Ukraine in February, with Brent nearing an all-time high of $147 in March. Recently, concerns about the recession, high interest rates and the strength of the dollar have weighed.

“Oil is currently under the influence of financial forces,” said Tamas Varga of oil broker PVM.

The US dollar, which has eased from a 20-year high, also helped support oil. A strong dollar makes crude more expensive for buyers using other currencies.

The fall in oil prices over the past few months has sparked speculation of a possible intervention by OPEC+. Iraq’s oil minister said on Monday that the group was monitoring prices and did not want a big jump or a slump. Read more

“Only an OPEC+ production cut can break the short-term negative momentum,” said Giovanni Staunovo and Wayne Gordon of Swiss bank UBS.

The market awaits the latest U.S. inventory reports, which analysts say will show a 300,000 barrel increase in crude inventories. The American Petroleum Institute report was released at 4:30 p.m. EDT (2030 GMT) on Tuesday.

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Additional reporting by Alex Lawler in London and Mohi Narayan in New Delhi; Editing by David Evans, Mark Potter, David Gregorio and Leslie Adler

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