Hurricane Ian reduces oil production, which increases the dollar

Oil prices were mixed in early Asian trading on Wednesday as support from U.S. production constraints caused by Hurricane Ian fought with crude storage growth and a strong dollar.

Brent crude prices decreased by 4 cents, or 0.1%, to $86.23 a barrel at 00:22 GMT, while U.S. West Texas Intermediate (WTI) crude futures rose 22 cents to $78.01 per barrel.

After shutting down production in anticipation of Hurricane Ian, which made landfall in the U.S. Gulf of Mexico on Tuesday is anticipated to intensify into a dangerous Category 4 storm over the warm waters of the Gulf, companies have begun returning staff to offshore oil rigs.

Approximately 190,000 barrels per day, or 11% of the Gulf's total oil output, was shut down, according to the Bureau of Safety and Environmental Enforcement (BSEE). Nearly nine percent of daily natural gas production, or 184 million cubic feet, was lost by producers. According to the BSEE, employees from fourteen production platforms and rigs were evacuated.

Ian is the first hurricane to damage oil and gas production in the U.S. Gulf of Mexico, which produces around 15% of the nation's crude oil and 5% of its dry natural gas.

Oil prices were constrained by the dollar. The dollar, which typically goes in the opposite direction of oil, remained at a 20-year peak.

Estimates of U.S. oil in storage provided contradictory signals for oil prices.

According to market sources citing data from the American Petroleum Institute, crude oil inventories climbed by around 4.2 million barrels for the week ending September 23, while gasoline inventories declined by approximately 1 million barrels.

According to unnamed sources, distillate stockpiles climbed by almost 438 thousand barrels. [API/S]

The Energy Information Administration will disclose official data on Wednesday at 4:30 p.m. EDT.