By Barani Krishnan
Investing.com - Global oil markets put in a modest recovery on Tuesday after a 2% tumble in the previous session, as investors awaited U.S. inventory data that would point to demand in a market still struggling to return to optimal output after Hurricane Ida.
New York-traded West Texas Intermediate, the benchmark for U.S. oil, settled at $70.49 per barrel, up 35 cents, or 0.5%. WTI lost 2.3% on Monday.
London-traded Brent crude, the global benchmark for oil, finished the session at $74.36, up 44 cents, or 0.6%. Brent closed down 1.9% in the previous session.
Crude tumbled with other major risk assets on Monday as a debt crisis at Chinese property giant Evergrande sparked concerns about spillover risks in the world’s second-largest economy.
“Crude seems like it is forming a trading range here and a further consolidation seems likely until China slowdown concerns disappear,” said Ed Moya, analyst at online trading platform OANDA.
Tuesday’s modest recovery in crude came as investors awaited a weekly snapshot on U.S. inventories from the American Petroleum Institute.
API will issue at 4:30 PM ET (20:30 GMT) its log on U.S. crude, gasoline and distillate stockpiles for the week ended Sept. 17. The figures serve as a precursor to the official weekly inventory data due on Wednesday from the EIA, or U.S. Energy Information Administration.
Analysts tracked by Investing.com have forecast that crude inventories fell by 2.44 million barrels last week, compared with the previous week’s draw of 6.42 million.
Gasoline inventories likely slid by 1.07 million barrels, after the drop of 1.86 million in the previous week, forecasts showed.
Stockpiles of distillates, which include diesel and heating oil, is expected to have declined by 1.19 million barrels after a deficit of 1.69 million the week before.
Meanwhile, some 17% of oil output in the United States remain shut-in after last month’s Hurricane Ida, the Bureau of Safety and Environmental Enforcement said on Tuesday.
A total of 320,909 barrels equivalent of oil production on the U.S. Gulf Coast of Mexico, has not returned since the storm, the BSEE, which is responsible for monitoring the situation, said.
Also not restored were some 25% of gas output from the region, accounting for 566.67 million cubic feet per day of production, the agency said.
Ida forced the protective shut down of more than 90% of oil and gas production on the Gulf prior to its landfall on Aug. 29. While it was downgraded to a tropical storm later, facilities that shut for the hurricane have had trouble returning to optimal capacity.