U.S. West Texas Intermediate crude oil futures are edging lower on Friday, but still holding on to their weekly gains. The price action suggests profit-taking is taking place ahead of the weekend or traders are concerned about over-valuations. A drop in demand for riskier assets and commodities is also pressuring prices amid renewed concerns over the financial stability of China’s Evergrande, which is facing a debt crisis.
Earlier in the session, oil prices jumped to a two-month high before retreating. Nonetheless, the markets are headed for a third straight week of gains, supported by global output disruptions and inventory draws.
Despite today’s minor setback, oil prices are likely to remain supported for months due to disruptions in U.S. Gulf Coast production following Hurricane Ida and other storms. The situation is so bad that U.S. refiners are being forced to turn to other countries for supply.
US Oil Refiners Pick Iraqi, Canadian Crudes to Replace Storm Losses – Traders
U.S. oil refiners hunting to replace lost after a storm hit the U.S. Gulf of Mexico last month have been turning to Iraqi and Canadian oil, while Asian buyers have been pursuing Middle Eastern and Russian grades, analysts and traders said.
Royal Dutch Shell, the largest producer in the U.S. Gulf of Mexico, this week said damage from Hurricane Ida to an offshore transfer facility will limit Mars sour crude supplies into early next year. The grade is used…