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Oil rose for a second day on Wednesday, gaining more than 2%, as a hurricane closed US offshore oil and gas production and an industry report showed US crude inventories decreased.
More than a quarter of US offshore output was shut on Tuesday due to Hurricane Sally. The American Petroleum Institute on Tuesday said crude inventories fell 9.5 million barrels, rather than increased as analysts expected.Brent crude rose 77 cents, or 1.9%, to $41.30 a barrel by 0755 GMT, while US crude added 85 cents, or 2.2%, to $39.13. Both contracts rose by more than 2% on Tuesday.
“Overnight, the API provided a further injection of bullish impetus,” said Stephen Brennock of oil broker PVM. “As much as a feel-good factor appears to have returned to the oil market, underlying fundamentals remain far from supportive.”
The storm-related shutdowns may help reduce stockpiles although refineries were also closed, cutting demand. Official Energy Information Administration stocks data, which does not always confirm the API figures, is due at 1430 GMT.
Oil prices collapsed to historic lows as the coronavirus crisis hit demand. A record supply cut by OPEC and its allies, known as OPEC+, and an easing of lockdowns has helped Brent recover from a 21-year low below $16 in April.
Prices have dropped in September, pressured by rising virus cases and concerns about demand. The Organization of the Petroleum Exporting Countries and International Energy Agency have both cut their demand outlooks this week.
A panel of OPEC+ oil ministers meets to review the supply pact on Thursday and is unlikely to recommend further output curbs despite the price drop, sources told Reuters.