Oil prices pared early gains on Monday, off more than three-week highs reached earlier in the session as a powerful hurricane ploughing through the Gulf of Mexico forced shutdowns and evacuations of hundreds of offshore oil platforms.
Brent was up 16 cents or 0.2% at $72.86 a barrel by 0153 GMT. It rose more than 11% last week in anticipation of disruptions to oil production from Ida.
U.S. oil turned negative and was down by 4 cents at $68.70 a barrel, having jumped a little over 10% over last week.
The benchmarks hit highs not seen since early August, $73.69 and $69.64, respectively, earlier in the session, as Ida slammed ashore near Port Fourchon, Louisiana, a hub of the Gulf’s offshore energy industry.
”This is nothing new but every hurricane is different and brings uncertainty for the region that contributes heavily to U.S. output,” said Craig Erlam, senior market analyst at OANDA.
”Should it pass without major issues then we could see oil paring some of these gains on Monday,” he added.
The Gulf supplies about 17% of the nation’s oil.
Oil and gas companies had evacuated around 300 offshore facilities and moved more than 10 drill vessels out of harm’s way, the offshore regulator said.
Louisiana Offshore Oil Port (LOOP), the biggest privately owned crude terminal in the United States, halted deliveries before the hurricane.
LOOP is the only U.S. terminal able to unload supertankers, handling about 10% to 15% of U.S. domestic oil, 10% to 15% of its oil imports, and is connected to about half of the U.S. refining capacity, the Port Fourchon website says.
Ida smashed into the coast near Port Fourchon at 11:55 a.m. CDT (16:55 GMT) on Sunday as an extremely dangerous Category 4 hurricane, the National Hurricane Center said, before starting to weaken.
Those who either could not or would not evacuate will have to brace for the toughest test yet of the billions of dollars spent on levee upgrades around nearby New Orleans following Hurricane Katrina more than a decade ago.
All of New Orleans has lost power after ”catastrophic transmission damage”, Entergy Louisiana said.”This is one of the strongest storms to make landfall here in modern times,” Louisiana Governor John Bel Edwards told reporters at a briefing before Ida came ashore.