Oil futures settled higher Sept. 13 on the back of strengthened demand outlooks and continued supply disruptions stemming from Hurricane Ida.
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NYMEX October WTI settled up 73 cents at $70.45/b and ICEC November Brent climbed 59 cents to $73.51/b.
OPEC is more bullish on the global economic recovery for next year, projecting world oil demand to exceed pre-pandemic levels in 2022, while the bloc and its allies plan to continue gradually raising crude output.
In its closely watched oil market forecast released Sept. 13, OPEC raised its forecast of 2022 global demand growth to 4.15 million b/d, a hefty hike from last month's 3.28 million b/d. It said the higher 2022 estimate, with demand now expected to hit 100.83 million b/d for the year, was driven by a stronger than anticipated recovery in various fuels and a steady economic outlook in all regions.
"Last week, reports circulated that OPEC could revise lower its 2022 oil demand growth forecast, so today's increase of 0.9 mb/d from last month's report is a nice surprise," OANDA senior market analyst Ed Moya said.
The 2021 demand growth forecast was kept largely unchanged, at 5.96 million b/d from 2020 levels.
NYMEX October RBOB settled 69 points higher at $2.1609/gal and October ULSD climbed 1.23 cents to $2.1583/gal.
Meanwhile, lingering supply disruptions resulting from Hurricane Ida added further upside price pressure. As of Sept. 13, 793,522 b/d or 43.6% of Gulf of Mexico output remains shut in following Ida, according to the US Bureau of Safety and Environmental Enforcement. To date Ida, which made landfall Aug. 29 as a category 4 hurricane, has kept in aggregate more than 26 million barrels of crude in the ground over the past 18 days.
The lingering shut ins is likely to contribute to further draw downs in US crude supply. US commercial crude stocks are expected to have declined 3.5 million barrels to around 420.4 million barrels in the week ended Sept. 13, analysts surveyed by S&P Global Platts said Sept. 13.
Texas coast braces for Nicholas
The Texas Gulf Coast's refining complex prepared for Tropical Storm Nicholas on Sept. 13 just as neighboring Louisiana and the US Gulf of Mexico oil and gas producers continued to recover from the devastation of Hurricane Ida just more than two weeks prior.
With maximum sustained winds of 60 mph, Nicholas is expected to be more of a rain event as it makes a late-Sept. 13 or early-Sept. 14 landfall, unlike Ida with Category 4 winds, according to the National Hurricane Center. As such, there were not any reports of refinery shutdowns ahead of Nicholas with most refiners on the Texas Coast and in western Louisiana monitoring the storm's progress and implementing their storm preparedness plans.
While nearly half of US Gulf oil and gas production offline Sept. 13 from Ida, producers were not planning to shut in more production because of Nicholas.
While operations were normal Sept. 13 at most Texas oil refineries, ExxonMobil said its two Texas refineries -- the 560,500 b/d Baytown plant and the smaller, 369,024 b/d Beaumont plant -- were preparing for Nicholas.
Other refineries also were monitoring the storm before taking action, said Citgo, Phillips 66 and other major Texas refiners.