Oil prices stable as threat of US storm eases

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Crude oil storage tanks are seen in an aerial photograph at the Cushing Oil Hub in Cushing, Oklahoma, USA, April 21, 2020. REUTERS / Drone Base / File Photo

  • IEA, OPEC See 100 Million Barrels Per Day Of Oil Demand In Months
  • U.S. Gulf Coast businesses resume recovery as Nicholas backs down
  • Soaring gas prices in Europe also back oil analyst

NEW YORK, Sept. 16 (Reuters) – Oil prices stabilized on Thursday after peaking several weeks a day earlier as Hurricane Nicholas threat to U.S. Gulf crude production s ‘faded.

Brent crude ended the session up 21 cents, or 0.3%, at $ 75.67 a barrel. Brent hit $ 76.13 on Wednesday, its highest level since July 30.

US West Texas Intermediate (WTI) ended the session unchanged at $ 72.61 a barrel after hitting its highest level since August 2 on Wednesday.

“With prices now back around summer highs, we are seeing some profit taking, but the rally continues to look well supported,” said Craig Erlam, senior market analyst at OANDA.

U.S. Gulf energy companies were able to restore pipeline service and electricity quickly after Hurricane Nicholas hit Texas earlier this week, allowing them to focus on efforts to repair damage a few more weeks early by Hurricane Ida. Read more

“As Nicholas has spared US production from further disruption, it is difficult to see how oil prices can rise further in the near term,” said Nishant Bhushan, analyst at Rystad Energy. “The oil production capacity affected by Ida continues to recover in the United States”

Oil surged on Wednesday, supported by figures showing US crude inventories fell 6.4 million barrels more than expected last week, with offshore oil facilities still recovering from Ida’s impact.

Brent has rebounded about 45% this year, supported by supply cuts by the Organization of the Petroleum Exporting Countries (OPEC) and its allies, as well as some recovery from the collapse in demand linked to last year’s pandemic.

Oil is also finding support from a surge in electricity prices in Europe, which have skyrocketed due to factors such as low gas inventories and below-normal gas supplies from Russia. Read more

European gas benchmark prices at TTF’s Dutch hub have increased by more than 250% since January.

The surge in prices and the impact on oil “is a situation that I think will get worse before it gets better,” said Jeffrey Halley, analyst at OANDA.

Adding to signs of recovering demand for oil, closely watched reports from OPEC and the International Energy Agency this week indicated that global oil consumption will exceed 100 million barrels per day, a level last reached in 2019, starting in the second quarter of next year. Read more

“Although a large part of the OPEC and IEA adjustments are of a longer term nature, they nevertheless deserve some buying interest despite a significant demand risk over the rest of the year linked to the Delta variant (of the coronavirus), ”said Jim Ritterbusch, president of Ritterbusch and Associates in Galena, Illinois.

Additional reporting by Alex Lawler in London, Jessica Jaganathan and Roslan Khasawneh Editing by Marguerita Choy, David Goodman and Jonathan Oatis

Our Standards: The Thomson Reuters Trust Principles.


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