Brent crude futures for November added 45 cents, or 0.6%, to reach $72.08 a barrel while U.S. WTI crude futures for October was 45 cents, or 0.6% higher at $68.95 a barrel
Oil prices recovered on Wednesday after a U.S. industry report showed crude inventories dropped more than expected last week, steadying after overnight losses from the impact of Hurricane Ida on U.S. refineries.
Prices rose ahead of the OPEC+ meeting where it is expected to stick to a plan to add 400,000 barrels per day (bpd) each month through December.
Brent crude futures for November added 45 cents, or 0.6%, to reach $72.08 a barrel by 0651 GMT while U.S. West Texas Intermediate (WTI) crude futures for October was 45 cents, or 0.6% higher at $68.95 a barrel.
Tuesday’s report from the American Petroleum Institute (API) that showed a bigger-than-expected drop in U.S. crude inventories was bullish and is supporting prices, Avtar Sandu, a senior commodities trader at Phillips Futures said.
U.S. crude stocks fell by 4 million barrels for the week ended Aug. 27, according to two market sources, citing API figures on Tuesday.
According to Reuters poll of analysts, crude stocks would drop 3.1 million barrels ahead of the weekly Energy Information Administration (EIA) report due at 1430 GMT on Wednesday.
However, U.S. crude prices are expected to remain under pressure as offshore oil and gas production in the Gulf of Mexico is gradually recovering, but refinery operations will likely take longer to return to normal, analysts said.
We see a risk that the loss of U.S. refinery demand will be greater and more prolonged than the loss of crude supply, Bjornar Tonhaugen, head of oil markets at Rystad Energy, said in a note, adding that it could weigh on WTI prices through September.
OPEC+ sources said, despite an expected swift return of U.S. crude production, it expects the market to be in deficit at least until the end of 2021.
