A sticker indicates crude oil on the side of a storage tank in the Permian Basin in Mentone, Loving County, Texas, USA, November 22, 2019. REUTERS / Angus Mordant
SINGAPORE, Sept. 15 (Reuters) – Oil prices soared on Wednesday after industry data showed a larger-than-expected drop in crude oil inventories in the United States, the world’s largest consumer of oil, and on expectations for a recovery in demand as vaccine deployment expands.
But a decline in China’s crude oil flow in August, with daily refinery cycles hitting the lowest since last May, and faltering overall plant production, capped oil price gains. Read more
Brent crude oil rose 54 cents, or 0.7%, to $ 74.14 a barrel at 6:59 a.m. GMT, while U.S. West Texas Intermediate (WTI) crude climbed 53 cents, or 0.8%, at $ 70.99 per barrel.
U.S. inventories of crude oil, gasoline and distillate all fell last week, according to two market sources, citing figures from the American Petroleum Institute on Tuesday, after Hurricane Ida shut down many refineries and production. offshore drilling.
Crude inventories fell 5.4 million barrels for the week ended September 10. Analysts on average expected a drop of 3.5 million barrels.
“The impact of Hurricane Ida was much larger than expected and production in the Gulf of Mexico region may struggle to return until Tropical Storm Nicholas finishes punishing the region with rains. torrential, ”said Edward Moya, senior analyst at OANDA.
Tropical Storm Nicholas slowly moved across the Gulf Coast on Tuesday, leaving hundreds of thousands of homes and businesses without power, although refineries in Texas continued to operate normally. Read more
Nicholas’ damage comes just two weeks after Hurricane Ida took a significant amount of refining capacity off the Gulf Coast.
Meanwhile, after a three-month drop in global oil demand due to the spread of the Delta variant of the coronavirus and renewed pandemic restrictions, the vaccine rollout is expected to rebound, the International Agency said on Tuesday. of energy (IEA), also contributes to the rise in prices. Read more
Details of China’s plans to sell crude from strategic reserves, however, put pressure on prices, with China’s state reserves administration saying it will auction 7.4 million barrels. of gross on September 24.
“The big question mark is what the next wave will look like, but optimism is growing that each wave (of coronavirus) will be less severe as more countries get their hands on vaccines “said Moya.
“The oil market remains in deficit and supply disruptions in the United States are expected to keep prices strong in the short term.”
Reporting by Jessica Jaganathan; Editing by Lincoln Feast and Louise Heavens
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