Oil Rises on Supply Concerns as Hurricane Ida Disrupts Global Oil Market

Crude oil gained on Monday amid concerns output from the United States, the world’s largest oil producer may remain below usual level given damages done by Hurricane Ida three weeks ago.

Brent crude oil, against which Nigerian crude oil is priced, gained 62 cents or 0.9 percent to $73.54 a barrel at 11:56 am Nigerian time while the U.S West Texas Intermediate (WTI) crude oil appreciated by 64 cents or 0.9 percent to $70.36 per barrel.

Brent crude oil has remained in range, trading between $70 and $74 per barrel in the last three weeks, a position expected by most oil experts to be maintained in the near-term.

“Oil prices may not have much room to rise in the near term, but at the same time are not expected to crash soon,” said Stephen Brennock of broker PVM.

Last week, in a report released by th U.S. Energy Information Administration (EIA), the administration said it expects Brent crude oil to remain around current levels for the rest of 2021, averaging $71 a barrel in the fourth quarter of the year.

“Markets still need clarity on the virus impacts beyond the very near term and until we get that, it seems like most assets, including oil, may continue to drift sideways,” Howie Lee, an economist at Singapore’s OCBC bank.