By Barani Krishnan
Investing.com - Oil cruised to a fourth straight weekly gain, riding on the impact of unexpected supply shortages from the three-week old Hurricane Ida, despite a risk-off sentiment across markets on Friday that weighed partially on crude prices.
New York-traded West Texas Intermediate , the benchmark for U.S. oil, hovered at $72.11 per barrel by 12:42 PM ET (16:42 GMT), down 45 cents, or 0.6%. WTI was up 3% on the week though.
crude, the global benchmark for oil, was at $75.33, down 34 cents, or 0.5%, on the day. Brent also rose 3.2% on the week.
Crude prices came under pressure on Friday as Wall Street sagged on a closely-watched University of Michigan consumer survey that found Americans’ desire to purchase houses, cars and household items near a record low due to their high prices. Consumers account for more than two-thirds of the U.S. economy.
Also weighing on markets was President Biden’s plan to raise corporate taxes by 5.5 percentage points to 26.5% and next week’s Federal Reserve meeting that could revisit the subject of taper for the central bank’s stimulus program that has juiced stock prices over the past 18 months.
“It’s a risk-off day that scalped a few heads, including oil’s,” said John Kilduff. “But crude is still cruising on the supply tightness caused by Ida. There’s some talk today that the situation is easing. But it’s nowhere near enough to cause a meaningful correction in oil that will happen — at some point.”
Ida shut down more than 90% of gas production facilities on the U.S. Gulf of Mexico prior to making landfall on Aug. 29.
As of Thursday, some 18 days after the storm’s landfall, some 513,878 barrels equivalent of oil, or 28.24% of the production in the U.S. Gulf Coast of Mexico remained shut-in, according to the Bureau of Safety and Environmental Enforcement, the government agency monitoring the situation.
U.S. crude crude stockpiles dropped by 6.422 million barrels in the latest week to Sept. 10 on heavier-than-expected drawdown from inventories by refiners facing a squeeze in domestic crude supply, data from the Energy Information Administration showed.
Analysts polled by Investing.com had forecast a drop of 3.544 million barrels for the week to Sept. 10. In the previous week to Sept. 3, crude draws hit four-week lows from Ida-related disruptions.
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