Oil slips but holds to most gains after draw in US stocks
U.S. crude oil and fuel stockpiles dropped sharply last week
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Lipow Oil Associates Andy Lipow discusses the oil industry struggling with Hurricane Ida fallout, demand hitting its peak and the president's policies stifling U.S. energy independence.
Oil prices slipped on Thursday but kept most of the previous day's gains after a larger-than-expected drawdown in crude oil stocks in the United States, the world's largest oil consumer.
Brent crude oil fell 13 cents, or 0.2%, to $75.33 a barrel by 0128 GMT, after settling up 2.5% the previous day.
U.S. West Texas Intermediate (WTI) crude slipped 12 cents, or 0.2%, to $72.49, after settling 3.1% higher on Wednesday.
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Crude oil storage tanks are seen in an aerial photograph at the Cushing oil hub in Cushing, Oklahoma, U.S. April 21, 2020. REUTERS/Drone Base/File Photo
U.S. crude oil and fuel stockpiles dropped sharply last week, as refiners in the U.S. Gulf region and oil facilities offshore were still recovering from Hurricane Ida, the Energy Information Administration (EIA) said on Wednesday.
Crude inventories fell by 6.4 million barrels in the week to Sept. 10 to 417.4 million barrels, the EIA said, compared with expectations in a Reuters poll for a 3.5 million-barrel drop.
"The data follow warnings from the International Energy Agency that supply lost from storms in the Gulf of Mexico would offset gains from OPEC," analysts from ANZ Research said in a note on Thursday.
The storm caused a global decline in supply for the first time in five months but the market is set to begin approaching balance in October as the Organization of the Petroleum Exporting Countries (OPEC) and allies such as Russia, a grouping called OPEC+, carry out plans to increase supply.
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Still, U.S. Gulf energy companies have been able to quickly restore pipeline service and electricity after Hurricane Nicholas passed through Texas, allowing them to double down on efforts to repair more significant damage from Ida.
Nicholas caused minor flooding and power outages in Texas and Louisiana, where some refineries remained offline in the wake of Category-4 Hurricane Ida.
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The earlier storm shut a large portion of the U.S. Gulf offshore oil and gas output. About 30% of U.S. Gulf production remained shut as of Wednesday, according to the Bureau of Safety and Environmental Enforcement.
Reporting by Jessica Jaganathan