Oil prices slow, but maintain previous gains

Oil prices slowed yesterday, but it, however, kept most of the previous day’s gains after a larger-than-expected drawdown in crude oil stocks in the United States, the world’s largest oil consumer.

Brent crude oil fell 13 cents, or 0.2 per cent to $75.33 a barrel after settling up 2.5 per cent the previous day, while the (WTI) crude slipped 12 cents, or 0.2 per cent to $72.49, after settling 3.1 per cent 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 the Organization of Petroleum Exporting Countries, 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 the OPEC and allies such as Russia, a grouping called OPEC+, carry out plans to increase supply.

Still, US Gulf energy companies have 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.

The earlier storm shut a large portion of the US Gulf offshore oil and gas output. About 30 per cent of US Gulf production remained shut as of Wednesday, according to the Bureau of Safety and Environmental Enforcement.