Oil climbs after storms put pressure on US stocks

Singapore — Oil prices climbed on Thursday, extending the previous day’s solid gains after a larger-than-expected drawdown in crude oil stocks in the US, the world’s largest oil consumer.

Brent crude oil rose 18 US cents, or 0.2%, to $75.64 a barrel by 3.40am GMT, after settling up 2.5% the previous day.

US West Texas Intermediate (WTI) crude was up 18c, or 0.3%, to $72.79, after settling 3.1% higher on Wednesday.

US crude oil and fuel stockpiles dropped sharply last week, as refiners in the US Gulf region and oil facilities offshore were still recovering from Hurricane Ida, the Energy Information Administration (EIA) said on Wednesday.

Crude inventories fell by 6.4-million barrels in the week to September 10 to 417.4-million barrels, the EIA said, compared with expectations in a Reuters poll for a 3.5-million-barrel drop.

“The data follow warnings from the International Energy Agency that supply lost from storms in the Gulf of Mexico would offset gains from Opec,” analysts from ANZ Research said in a note on Thursday.

The storm caused a global decline in supply for the first time in five months but the market is set to begin approaching balance in October as oil cartel Opec and allies such as Russia, a grouping called Opec+, carry out plans to increase supply.

US Gulf energy companies have also been able to quickly restore pipeline service and electricity after Hurricane Nicholas passed through Texas, allowing them to double down on efforts to repair more significant damage from Ida.

Nicholas caused minor flooding and power outages in Texas and Louisiana, where some refineries remained offline in the wake of category 4 Hurricane Ida.

Ida shut a large portion of the US Gulf offshore oil and gas output. About 30% of US Gulf production remained shut as of Wednesday, according to the Bureau of Safety and Environmental Enforcement. 

Reuters