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Oil gains as hurricane shuts U.S. output, stockpiles fall

Published 09/16/2020, 09:16 AM
Updated 09/16/2020, 09:20 AM
© Reuters.
LCO
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CL
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TOKYO, Sept 16 (Reuters) - Oil prices rose on Wednesday,
extending gains from the previous session, as a hurricane
disrupted U.S. offshore oil and gas production and an industry
report showed a big drop in U.S. crude stockpiles.
Brent crude LCOc1 was trading up 15 cents, or 0.4%, at
$40.68 a barrel by 0055 GMT, while U.S. crude CLc1 gained 18
cents, or 0.5%, to $38.46 a barrel. 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 showed on
Tuesday. API/S
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. EIA/S
Meanwhile, oil producers and traders are painting a bleak
picture for a recovery in fuel demand globally as the COVID-19
pandemic rages on, hammering economies.

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