Oil mixed on hurricane Ian output, dollar weighs

Oil prices were varied in early Asian trade on Wednesday as support from U.S. production cuts caused by Hurricane Ian contended with crude storage builds and a strong dollar.

Brent crude futures dropped 4 cents, or 0.1 percent, to $86.23 per barrel by 0022 GMT, while U.S. West Texas Intermediate crude futures were up 22 cents at $78.03 per barrel.

Producers started to return workers to offshore oil platforms after shutting in output ahead of Hurricane Ian, which entered the U.S. Gulf of Mexico on Tuesday and is forecast to become a dangerous Category 4 storm over the warm waters of the Gulf.

About 190,000 barrels per day of oil production, or 11 percent of the Gulf’s total were shut-in, according to offshore regulator the Bureau of Safety and Environmental Enforcement (BSEE). The BSEE also stated that Producers lost 184 million cubic feet of natural gas, or nearly 9 percent of daily output. Personnel were evacuated from 14 production platforms and rigs.

The first hurricane this year is Ian. It also made a disruption in oil and gas production in the U.S. Gulf of Mexico, which produces about 15 percent of the nation’s crude oil and 5 percent of dry natural gas.

Moreover, limiting oil prices was the U.S. dollar. The dollar, which typically trades inversely with oil, stood near a 20-year high.

Meanwhile, Estimates of U.S. oil in storage also sent mixed messages about oil prices.

Although, U.S. crude oil in storage increased by about 4.2 million barrels for the week ended Sept. 23, according to market sources on Tuesday citing figures from industry group the American Petroleum Institute, gasoline inventories fell by about 1 million barrels.

Distillate stocks inched up by about 438,000 barrels, according to the sources, who spoke on condition of anonymity.

The report comes before official Energy Information Administration data on Wednesday at 4:30 p.m.