Oil headed for a back-to-back weekly gain as traders weighed the impact of Hurricane Ida on United States oil infrastructure, and ahead of key American jobs data.
West Texas Intermediate futures were little changed on Friday, but 1.8 percent higher for the week. Exxon Mobil Corp. is tapping the US Strategic Petroleum Reserve with more than 90 percent of the Gulf of Mexico’s oil production still shut after the hurricane, while Louisiana’s refineries are still reeling from the impact of the storm.
The dollar held a drop — making commodities priced in the currency cheaper — ahead of a US jobs report that will shape views on the outlook for Federal Reserve monetary policy.
Oil has climbed even though the Organization of Petroleum Exporting Countries and its allies this week decided to push ahead with their supply increase, while concerns about the impact of the pandemic on energy demand persist. OPEC+ has said crude stockpiles in developed countries are falling and an economic recovery is accelerating.
There have been signs of revival in Asia, where Covid-19 infections had surged. China’s independent refiners are buying more crude and gasoline consumption in India in improving. The return of Iranian supply also looks even further away.
“Oil prices continue to trade at relatively elevated levels despite OPEC+ reaffirming plans to normalize output and Covid-19 demand woes still present,” said Jens Pedersen, senior analyst at Danske Bank. “A strong jobs report could reverse the drop in the dollar and hit oil prices,” while the market continues to assess the impact of Hurricane Ida, he said.
Further details on the disruption from Ida may come later Friday when President Joe Biden visits Louisiana to survey some of the damage. He will meet with Governor John Bel Edwards and local officials in the state, where hundreds of thousands of homes and businesses remain without electricity. Bloomberg News