Oil prices rose 2% Wednesday as market participants focused on another larger-than-expected weekly crude draw caused by Hurricane Ida-related disruptions, while ignoring a surprise gasoline build.
Crude stockpiles dropped by 3.481 million barrels in the week to Sept. 17, the Energy Information Administration said in its Weekly Petroleum Status Report. Analysts tracked by Investing.com had forecast a drop of 2.45 million barrels for the week. In the previous week to Sept. 10, crude draws ballooned to 6.422 million barrels, almost double to expectations due to Ida-related disruptions.
Distillates inventories, which include diesel and heating oil, fell by 2.55 million barrels last week against expectations for a draw of 1.11 million barrels, the EIA data showed. In the previous week, distillate inventories fell by 1.69 million barrels.
But gasoline stockpiles — a data point relatively more important than distillates — bucked the downtrend, rising by 3.47 million barrels, compared with expectations for a draw of 1.47 million barrels. In the previous week, gasoline stockpiles fell 1.86 million.
“There’s a good amount of crude production that’s back since the storm and demand for gasoline is down from the summer peak of 9.4 million barrels a day to 8.8 million barrels now,” said John Kilduff, founding partner at New York energy hedge fund Again Capital. “But the market is obviously ignoring the gasoline element today, keeping the focus on the crude draw.”
New York-traded West Texas Intermediate, the benchmark for U.S. oil, was up $1.74, or 2.5%, at $72.23 per barrel.
London-traded Brent crude, the global benchmark for oil, rose $1.83, or 2.5%, to finish at $76.19.
Ida shut down more than 90% of oil and gas production facilities on the US Gulf of Mexico prior to making landfall on Aug. 29. As of Tuesday, more than three weeks after the hurricane, some 16% of oil production on the Gulf, accounting for 320,909 barrels equivalent, remained shut-in due to complications caused by the storm. Investing.com