Oil rises on US stockpile draw and hurricane jitters
Thursday, 31 August 2023
LONDON, Aug 30 (Reuters): Oil prices extended gains on Wednesday after industry data showed a large draw in crude inventories in the US, the world's biggest fuel consumer, and as a hurricane in the Gulf of Mexico kept investors on edge.
Brent crude futures for October rose by 34 cents, or 0.4 per cent, to $85.83 a barrel by 1325 GMT. The October contract expires on Thursday and the more active November contract was at $85.24, up 33 cents.
US West Texas Intermediate crude futures rose 45 cents, or 0.55 per cent, to $81.61.
Both benchmarks rallied by more than a dollar on Tuesday as the U.S. currency weakened after soft U.S. jobs data reduced the likelihood of further increases to interest rates.
U.S. crude stocks fell by a bigger than expected 11.5 million barrels in the week ended Aug. 25, market sources said, citing American Petroleum Institute figures on Tuesday.
The drop suggests firm demand, said Fujitomi Securities analyst Toshitaka Tazawa.
Investors also had an eye on Hurricane Idalia as it moved over the Gulf of Mexico to the east of major US oil and natural gas production sites. The region accounts for about 15 per cent of U.S. oil output and about 5 per cent of natural gas production, according to the Energy Information Administration (EIA).
Oil major Chevron Corp evacuated some staff from the region but production was continuing.
The EIA releases its weekly petroleum status report at 1430 GMT on Wednesday, while US oil refiners are expected to register a 119,000 barrel per day (bpd) drop in refining capacity in the week ending Sept. 1 compared with a week earlier, research company IIR Energy said on Wednesday.
Elsewhere, analysts expect Saudi Arabia, the world's biggest oil exporter, to extend its voluntary output cut into October, keeping oil supply tight.
Based on that expectation, refining sources surveyed by Reuters forecast that Saudi Arabia's official selling prices for all crude grades sold to Asia in October will be raised to their highest this year.