Oil prices pared early gains on Monday, August 30, dropping from a more than three-week high reached earlier in the session, as powerful Hurricane Ida smashed into the US Gulf of Mexico, forcing authorities to close and evacuate hundreds of offshore oil rigs.
Brent crude rose five cents, or 0.4%, to $72.75 a barrel by 05:59 GMT. Crude rose more than 11% last week in anticipation of a disruption to oil production due to IDA.
US West Texas Intermediate crude turned lower and fell 31 cents, or 0.5%, to $68.43 a barrel, after jumping a little more than 10% last week .
The two benchmarks hit highs not seen since August at $73.69 and $69.64, respectively, earlier in the session, as Ida swept the coast near Port Fortune, Louisiana, the center of the offshore energy industry in the Gulf of Mexico.
Gasoline prices in the United States rose more than 3% as power outages were added to the closure of refineries on the Gulf Coast and the focus shifted to crude products. Analysts say crude prices have also fallen in anticipation of a likely rapid recovery in oil production.
Energy companies stop about 95% of production
By Sunday, energy companies had shut down 95 percent of oil production, or 1.74 million barrels per day, in the US Gulf of Mexico, according to the Office of Safety and Environmental Enforcement, as Ida headed toward drilling rigs and other infrastructure.
The Gulf supplies account for about 17% of the oil in the United States.
A regulator said oil and gas companies had evacuated about 300 offshore facilities and moved 10 drilling ships out of danger.
The National Hurricane Center reported that Ida hit the coast near Port Fortune, Louisiana, at 16:55 GMT Sunday after becoming a severely dangerous Category 4 hurricane.