Oil Up 2% Despite US Crude Build; Set For Best 3Q Since 2004
NEW YORK, Sept 20 (Reuters) - Oil prices settled up 2 percent on Wednesday despite a rise in U.S. crude inventories, with the market heading for its largest third-quarter gain in 13 years after the Iraqi oil minister said OPEC and its partners were considering extending or deepening output cuts.
Brent crude futures rose $1.06, or 1.9 percent, to $56.20 a barrel, while U.S. West Texas Intermediate (WTI) crude futures gained 93 cents, or 1.9 percent, to $50.41.
Crude prices were on course for a nearly 16 percent rise this quarter, which would make this year's performance the strongest for the third quarter since 2004.
U.S. crude oil stockpiles jumped last week as imports and production increased, the U.S. Energy Information Administration said, as operations resumed from the impact of Hurricane Harvey which hit the Gulf Coast on Aug. 25.
Crude inventories rose for a third straight week, building by 4.6 million barrels, about a million more barrels than forecast.
"The impact of Hurricane Harvey can still be seen in today's larger-than-expected build in the U.S. commercial crude stockpile," said Abhishek Kumar, Senior Energy Analyst at Interfax Energy's Global Gas Analytics in London. "However, this has had limited impact in dissipating the bullish sentiment prevailing in the market."
However, U.S. crude remains rangebound around $50.
The Brent/WTI spread WTCLc1-LCOc1 widened 36 cents to settle at negative $5.60. Because of the depressed price of U.S. crude compared to Brent, the spread is now the widest in more than two years.
"The hurricane widened it out," said Rob Haworth, senior investment strategist at U.S. Bank Wealth Management, pointing out that U.S. inventories and global inventories have different narratives because of Harvey.
"If I look at this week's EIA data, post hurricane ... the refined products drawdown implies that refineries are not yet back to normal," he said. "They're not replacing inventories for current demand."
Gasoline stocks fell 2.1 million barrels, the EIA said Wednesday, in line with analysts' expectations, while distillate stocks inventories fell 5.7 million barrels, the biggest weekly draw since November 2011.
The October front-month futures CLc1 contract expires on Wednesday.
On Friday the Organization of the Petroleum Exporting Countries and other producers will meet in Vienna to discuss the progress of their deal to limit output.
The group is considering a range of options, including an extension of cuts, but it would be premature to decide on what to do beyond the agreement's expiry in March, Iraqi oil minister Jabar al-Luaibi told an energy conference on Tuesday.
12
View Full Article
WHAT DO YOU THINK?
Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.
- Weatherford CEO's Rebound Plan Relies On Getting Smaller
- Iran Says Oil Market Is Too Tight For US Zero Exports Target
- China's Squeezed 'Teapots' Eye Petchem Path To Riches
- Baker Hughes: US Drillers Add Oil Rigs For Second Week In Three
- Venezuela Hands China More Oil Presence, But No Mention Of New Funds
- ExxonMobil Racks Up Discoveries in Guyana Block Eyed by Chevron
- Oil Market Sentiment Has Improved Significantly
- EU, US Eye Collaboration on Nuclear Materials
- USA Driving Activity to Increase to All-Time Highs
- EU Electricity Export to Ukraine Up 94 Percent in Two Years
- China Coal Output Falls for First Time since Government Ordered More
- TC Energy to Sell Prince Rupert Gas Pipeline Project to First Nation
- BP Pulse Buys One of Europe's Largest Truck Stops
- UK CCUS Plans Outdated: Think Tank
- I Squared Eyes Full Ownership of Europe Gas Storage Firm
- Norway Regulator Blasts Proposal to Halt New Oil and Gas Permits
- Chinese Mega Company Makes Major Oilfield Discovery
- EIA Drops 2024 Henry Hub Gas Price Forecast
- EIA and Standard Chartered Offer Up Latest Oil Price Predictions
- Red Sea Region Sees Another Watershed Incident
- Chevron Oil Project in Kazakhstan to Cost $48.5B
- OPEC Voices Encouragement after IEA Affirms Support for Oil Security
- Biden Govt Bares Strategy for Freight Charging, Hydrogen Fueling Infra
- Ukraine Hits Third Russian Refinery In Escalating Drone Strikes
- Rystad Looks at the Buzz Around White Hydrogen
- VIDEO: Missile Attack Kills Crew Transiting Gulf of Aden
- Norway Regulator Blasts Proposal to Halt New Oil and Gas Permits
- Chinese Mega Company Makes Major Oilfield Discovery
- What Is the Biggest Risk to Offshore Oil and Gas Personnel in 2024?
- Is Peak Oil Demand Close?
- Vessel Sinks in Red Sea After Missile Strike
- JP Morgan, Standard Chartered Reveal Latest Oil Price Forecasts
- Exxon Rights in Stabroek Do Not Apply to Hess Merger with Chevron: Hess
- Rystad Forecasts Net Production of Top Permian Producers in 2024
- Analysts Reveal Latest Oil Price Outlook Following OPEC+ Cut Extension