U.S. crude oil production fell 3.5% in September after Hurricane Ida temporarily halted most crude production in federal waters of the Gulf of Mexico, according to a monthly report from the U.S. Energy Information Administration on Tuesday. Crude output dropped 380,000 barrels per day to 10.809 mln bpd from a revised 11.189 mln bpd in August, the report said. The decline came as production in the offshore Gulf of Mexico fell by 464,000 bpd, offsetting onshore gains. Ida disrupted Gulf of Mexico production as it passed through the Gulf at the end of August. As a result of the storm, 96% of crude oil production and 94% of natural gas production in federal waters of the Gulf of Mexico was halted, according to the September EIA report. The disruptions continued into early September. At the same time, onshore oil production in Texas, the top-producing state, rose 87,000 bpd in the month, and North Dakota, the second-largest producer, had a gain of 8,000 bpd, the EIA said. The oil market is closely watching U.S. production as it has struggles to recover to pre-pandemic levels. September's output was about 2 million bpd below the record high, reached in March 2020. As production fell in the month, demand gained. Total U.S. petroleum demand in September rose 9.8%, or 1.81 million bpd, from a year earlier. Demand changes are measured year on year to account for seasonal variations in demand. In September, demand for distillates including diesel fuel was up 6.8% from a year earlier, while gasoline demand rose 5% from a year earlier. Meanwhile, natural gas production for the United States excluding Alaska fell to 104,672 million cubic feet per day in September from 105,354 in August. Natural gas production offshore also fell, dropping by 40% in the month to 1,203 million cubic feet a day, the EIA said. Reporting By Jessica Resnick-Ault; Editing by Mark Porter and Marguerita Choy Our Standards: The Thomson Reuters Trust Principles.