• Karry James

Oil rises as storm closes U.S. production, inventories drop


Oil prices rose for a second day on Wednesday as a hurricane closed U.S. offshore oil and gas production and an industry report showed a decrease in U.S. crude inventories.

Brent crude (LCOc1) rose 60 cents, or 1.5%, to $41.13 a barrel by 0518 GMT, while U.S. crude (CLc1) rose 68 cents, or 1.8%, to $38.96. Both contracts rose by more than 2% on Tuesday.

More than 25% of U.S. offshore oil and gas output was shut and export ports were closed on Tuesday as Hurricane Sally sat just off the U.S. Gulf Coast.

"Our current estimate for the total outage associated with the Sally weather system is between 3 million and 6 million barrels of oil over approximately 11 days," Rystad Energy said in a note.

That is likely to help reduce stockpiles although refineries were also shut down, cutting demand for oil.

U.S. crude oil inventories fell by 9.5 million barrels last week, although gasoline inventories increased, data from industry group the American Petroleum Institute (API) showed on Tuesday.

Analysts had expected oil stocks to increase by 1.3 million barrels. Official data on U.S. stockpiles is due out later on Wednesday and often conflicts with the industry figures.

"If we see a number similar to the ... drawdown the API reported overnight, it would likely provide some immediate support to the market," ING Research said.

(Graphic: Global Oil Supply, https://fingfx.thomsonreuters.com/gfx/mkt/jznvnxyymvl/globaloilsupply.JPG)


However, oil producers and traders are painting a bleak picture for a recovery in global fuel demand as the COVID-19 pandemic rages on, hammering economies.

The International Energy Agency also reduced its forecast for oil demand this year on Tuesday, because of a cautious outlook for the economic recovery from the pandemic.

That came after the Organization of the Petroleum Exporting Countries said it expects world oil demand to fall more sharply than earlier forecast.

Imports of oil in August into Japan, the world's fourth-biggest importer of crude, fell by more than a quarter from a year earlier, official data showed on Wednesday.

3 views0 comments

Contact Us

WHO WE ARE ?

OUR POLICIES

GET SUPPORT

FAQ's

Contact Us

Disclaimer- Signals factory is not an investment advisor and can neither advice you on your financial goals nor can it assess your risk profile. Signals factory provides market knowledge and training through webinars and demo signal packages to educate its customers. Please consult a qualified investment advisor before subscribing to any of the training packages if you are not sure about suitability of the packages.

Copyright © 2021 by Signalsfactory.info. All rights reserved

  • LinkedIn
  • Twitter
  • Signal Factory Whatsapp
  • Signals Factory Instagram
  • Signal Factory Facebook Page