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Saturday, October 23, 2021
Alternative Investments

Oil rises nearly 1% as U.S. crude stocks drop

Oil rises

U.S. West Texas Intermediate crude futures gained 75 cents, or 1.1%, to $71.24 a barrel, while Brent crude futures jumped 68 cents, or 0.9%, to $75.04 a barrel

Oil extended overnight gains, rising nearly 1% on Wednesday after industry data showed U.S. crude stocks fell more than expected last week in the wake of two hurricanes, highlighting tight supply as demand improves.

U.S. West Texas Intermediate (WTI) crude futures gained 75 cents, or 1.1%, to $71.24 a barrel at 0131 GMT, adding to a 35 cent gain from Tuesday.

Brent crude futures jumped 68 cents, or 0.9%, to $75.04 a barrel, after adding 44 cents on Tuesday.

The oil market’s focus turned to tight supply issues after coming under pressure on Monday on broader market jitters over the possible default of Chinese property developer China Evergrande Group.

U.S. crude stocks dropped by 6.1 million barrels for the week ended Sept. 17, market sources said, citing figures from the American Petroleum Institute on Tuesday.

That was a much bigger decline than the 2.4 million barrel drop in crude inventories which 10 analysts polled by Reuters had expected on average.

The market will be watching out for data from the U.S. Energy Information Administration on Wednesday to confirm the big drops in crude and fuel stocks.

Supply is expected to remain tight after Royal Dutch Shell, the largest U.S. Gulf of Mexico producer, said damage to its offshore transfer facilities would cut production into early next year.

Gasoline inventories dropped by 432,000 barrels and distillate stocks, which include jet fuel, dropped by 2.7 million barrels, the API data showed, according to the sources, who spoke on condition of anonymity.

That comes at a time when jet fuel demand is picking up.

Market sentiment got additional support from the end of the U.S. ban on foreign travellers, ANZ commodity analysts said in a note.

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