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Oil Recovers as Tight U.S. Supplies Offset China Reserves Sales Plan
Published by maria gbaf
Posted on September 10, 2021
3 min readLast updated: February 11, 2026
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Published by maria gbaf
Posted on September 10, 2021
3 min readLast updated: February 11, 2026
Add as preferred source on GoogleBy Florence Tan and Sonali Paul
SINGAPORE (Reuters) –Oil prices rose on Friday on growing signs of tightness in U.S. markets after Hurricane Ida hit offshore output, although benchmarks were heading for weekly losses of about 1% after China announced plans to sell crude from its strategic reserves.
Brent crude futures for November rose 44 cents, or 0.6%, to $71.89 a barrel by 0324 GMT. U.S. West Texas Intermediate (WTI) crude futures for October was at $68.49 a barrel, up 35 cents, or 0.5%.
Brent is headed for a second straight weekly loss.
Both contracts fell more than 1% to settle at their lowest since Aug. 26 on Thursday after China said it would release crude oil reserves https://www.reuters.com/business/energy/china-release-state-crude-oil-reserves-first-time-2021-09-09 to the market via public auction to ease the pressure of high feedstock costs on domestic refiners, in a move that was described as a first.
Some analysts said the announcement had likely been made to confirm the sale of reserves in July and August.
“While this sale likely weighed on China’s crude imports this summer, alongside depleted teapot import quotas, we expect limited further draws in China’s onshore crude inventories this year and a resumption of higher imports into year-end as demand picks up seasonally and following the recent COVID-19 outbreak,” Goldman Sachs analysts said in a note.
Energy Aspects analyst Liu Yuntao said the release from the reserve came as Chinese majors had to replace supplies they had bought for September and October loadings from Shell in the U.S. Gulf of Mexico.
Royal Dutch Shell Plc, the largest oil producer in the U.S. Gulf of Mexico, has cancelled some export cargoes https://www.reuters.com/business/energy/shell-declares-force-majeure-some-oil-deliveries-after-hurricane-ida-2021-09-09 due to Ida’s damage to offshore facilities.
Almost 1.4 million barrels per day (bpd) of offshore oil production remains shut https://www.reuters.com/business/energy/three-quarters-us-gulf-mexico-oil-output-remains-shut-2021-09-08 in the Gulf of Mexico and 1 million bpd of refining capacity is also still offline.
To cushion the impact, the U.S. Energy Department said on Thursday it has approved a second loan of 1.5 million barrels of oil https://www.reuters.com/business/energy/us-loans-exxon-another-15-million-barrels-oil-strategic-reserve-2021-09-09 to Exxon Mobil Corp from the Strategic Petroleum Reserve (SPR).
Still some U.S. airlines, key to a recovery in jet fuel demand, warned of a slowdown in ticket sales.
American Airlines, United Airlines Holdings Inc, Delta Air, Southwest Airlines Co and JetBlue Airways said ticket sales had slowed https://www.reuters.com/business/aerospace-defense/united-airlines-warns-delta-variant-hit-revenue-capacity-2021-09-09 and cut revenue forecasts as a surge in COVID-19 cases threatens to stall a recovery in travel.
(Reporting by Florence Tan in Singapore and Sonali Paul in Melbourne; Editing by Himani Sarkar)
Oil prices rose due to signs of tightness in U.S. markets following Hurricane Ida, which impacted offshore output.
China's announcement to release crude oil reserves led to a decline in oil prices, as it was expected to weigh on China's crude imports.
Almost 1.4 million barrels per day of offshore oil production remains shut in the Gulf of Mexico due to the impact of Hurricane Ida.
Several U.S. airlines, including American Airlines and Delta Air, have warned of a slowdown in ticket sales, which could impact jet fuel demand.
The U.S. Energy Department has approved a second loan of 1.5 million barrels of oil to cushion the impact of the supply disruptions.
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