KONTAN.CO.ID - LONDON. Oil prices dropped from a four-week high on Monday as Hurricane Ida weakened after forcing precautionary shutdowns of U.S. Gulf oil production, and attention turned to an OPEC meeting on Wednesday to discuss a further output boost. Within 12 hours of coming ashore, the storm had weakened into a Category 1 hurricane. Nearly all offshore Gulf oil production, or 1.74 million barrels per day, was suspended in advance of the storm. Brent crude was down 21 cents or 0.3% at $72.49 by 1020 GMT, having reached $73.69 earlier, the highest since Aug. 2. U.S. crude fell 50 cents or 0.7% to $68.24, having earlier touched $69.64, the highest since Aug. 6.
"Hurricane Ida will dictate oil's near-term direction," said Jeffrey Halley, senior market analyst at OANDA. "If Ida weakens and its path of destruction is lower than expected, oil's rally will temporarily lose momentum here." While crude fell on anticipation of a quick supply recovery, U.S. gasoline was up almost 3% as power outages added to refinery closures on the Gulf coast and traders weighed the possibility of prolonged disruptions. Read Also: Oil mixed as Hurricane Ida pounds U.S. crude patch, Louisiana "It's still early days," said Vivek Dhar, analyst at Commonwealth Bank of Australia. "Oil products, like gasoline and diesel, are likely to see prices rise more acutely from refinery outages especially if there are difficulties in bringing refineries and pipelines back online."