(Bloomberg) –Oil rose after a two-day decline with a selloff in global equities easing and some crude output still shut three weeks after Hurricane Ida hit the U.S.
Futures in London climbed above $75 a barrel. Wider markets recovered from a selloff on Monday, which also rippled into oil, ahead of this week’s Federal Reserve meeting. Ida is having a lasting impact on the oil market with some fields in the Gulf of Mexico unable to resume supply until next year. Traders are also weighing the impact of the global energy crunch on demand.
Oil has resumed its advance over the past month, in part due to a tightening of the market following lingering supply disruptions from U.S. storms. At the same time, consumption is coming into focus in anticipation that soaring natural gas prices will force a shift toward oil.
“Any macro selloff will continue to provide a buying opportunity for oil, especially with so much pent up demand out there from the growing gas-to-oil switch,” said Keshav Lohiya, chief executive officer of Oilytics.
- Brent for November deliver gained 1.2% to $74.82 a barrel by 10:23 a.m. in London, after rising to as high as $75.18
- West Texas Intermediate for October, which expires Tuesday, rose 1.5% to $71.35 a barrel
- The more-active November contract added 1.3% to $71.04
The outage in the Gulf of Mexico will disrupt about 300,000 barrels of daily output capacity, according to Bloomberg Intelligence, or one out of every six barrels pumped in the region. The disruption is forcing refiners and other buyers to seek alternative supplies.