By Jessica Summers on 9/20/2021
(Bloomberg) –Oil pared losses after Royal Dutch Shell Plc. said a critical U.S. Gulf of Mexico oil-production platform will be out of service for the rest of this year.
Futures in New York earlier fell the most in a month amid weaker equity markets and as the U.S. dollar gained, making commodities priced in the currency less attractive. Shell’s WD-143 “A” platform facilities will be offline for repairs until the end of 2021 after suffering damage from Hurricane Ida, the company said in a statement on Monday. As a result, the Mars and Ursa platforms won’t resume output until 2022.
Crude prices have fared well so far this month — U.S. oil futures are up about 4% in September — in part due to lingering supply disruptions from storms that have swept through the U.S. Gulf of Mexico.
Traders are also continuing to monitor the energy crunch in Europe amid talk of switching from gas to oil. There are expectations diesel demand will expand in Asia during winter, while the use of oil to generate power in the U.S. may jump.
- West Texas Intermediate for October delivery dropped $1.17 to $70.80 a barrel at 10:16 a.m. in New York
- Brent for November settlement fell 90 cents to $74.44
The prompt timespread for Brent was 85 cents a barrel in backwardation — a bullish structure where near-dated contracts are more expensive than those further out.