By Peter Nurse
Investing.com -- Crude oil prices weakened Tuesday as traders assess the damage caused to U.S. refining infrastructure by Hurricane Ida ahead of this week’s OPEC+ meeting.
By 9:20 AM ET (1320 GMT), U.S. crude futures were down 1.2% at $68.42 a barrel, while Brent futures were down 1.1% at $71.43 a barrel. Both benchmarks are on track for their first monthly loss since March.
U.S. Gasoline RBOB Futures were down 1.4% at $2.123 a gallon.
Hurricane Ida hit the U.S. Gulf Coast over the weekend, and traders are now trying to calculate the likely impact to the output from the offshore wells and output at six refineries in Louisiana that process almost 2 million barrels per day of crude, around 12% of U.S. refining capacity.
“It will take several days at least for output to return to normal as operators will need to assess any potential damage to offshore platforms,” said analysts at ING, in a note. “In the past, it has taken longer for refining capacity to return to normal. Infrastructure needs to be assessed for damage, while those refiners who lost power will need to wait for it to be restored.”
Adding to the negative sentiment was the disappointing economic news from China, the largest oil importer in the world, where factory activity expanded at a slower pace in August compared with the previous month.
The next meeting of the Organization of the Petroleum Exporting Countries and its allies, a group known as OPEC+, starts on Wednesday, with the group of top crude producers expected to press ahead with their planned revival of oil production.
“This means that 400M bbls/d of crude oil production will be brought back in September,” ING added.
Ahead of that meeting investors await U.S. crude oil supply data from the American Petroleum Institute, later in the day, with a draw of around 2.8 million barrels expected, following the draw of 1.6 million barrels the previous week.