Oil prices fell on Tuesday on concerns that power outages and flooding in Louisiana after Hurricane Ida will cut crude demand from refineries at the same time global producers plan to raise output.
Brent crude futures for October, due to expire on Tuesday, were down 46 cents, or 0.6%, at $72.95 a barrel, after gaining nearly 1% on Monday. The more active November contract fell 42 cents, or 0.6%, to $71.81.
The prospect that extended refinery outages will curb oil demand weighed on prices.
“With companies currently assessing damages, a current timeline for how long shuttered capacity will be down is still uncertain,” RBC analysts said in a note.
With “catastrophic” damage to the grid in Louisiana, power outages could last three weeks, utility officials said, which would slow efforts to repair and restart energy facilities.
Also keeping a lid on oil prices is the prospect that the Organization of the Petroleum Exporting Countries (OPEC) and allies, together known as OPEC+, will agree to go ahead with plans to add another 400,000 BPD of supply each month through December.
OPEC+ will meet on Wednesday. Delegates say they expect the production increase to go ahead, however, Kuwait’s oil minister said on Sunday that plan could be reconsidered amid concerns about raging COVID-19 infections in Asia limiting fuel demand.