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September 13, 2021

High Oil Prices Driven US Production Concerns

 Oil prices climbed to a one -week high in the Asian session today, continuing gains at the end of last week amid a slow recovery in oil production in the Gulf of Mexico.

After more than two weeks since Hurricane Ida struck, about 1.4 million barrels of crude oil production in the U.S. Gulf of Mexico is still stalled, according to the Bureau of Safety and Environmental Enforcement.

Royal Dutch Shell, the largest oil producer in the Gulf of Mexico, has canceled some export cargo due to damage to the facility caused by the hurricane. This indicates the loss of energy will continue for weeks.

Brent crude futures rose 36 cents, trading higher at $ 73.28 a barrel, while US WTI traded up 40 cents at $ 70.12 a barrel.

Even so, news over the weekend limited price hikes higher, with Iran and the International Atomic Energy Organization (IAEA) reportedly having reached an agreement in a bid to revive Iran’s 2015 nuclear deal.

This further raises the prospect of new nuclear talks between Iran-US, and this also means hopes for crude oil from Tehran to return to world markets are also rising.

Meanwhile, market attention is now shifting to demand projections for 2022 from the Organization of the Petroleum Exporting Countries (OPEC) and the International Energy Agency (EIA) this week.