[Editor’s note: This story was updated from a previous version posted at 5:05 p.m. CT Sept. 15.]
Oil rose for a second day on Sept. 16, gaining more than 2%, as a hurricane closed U.S. offshore production and an industry report showed U.S. crude inventories unexpectedly decreased.
More than a quarter of U.S. offshore oil and gas production was shut on Set. 15 due to Hurricane Sally. The American Petroleum Institute (API) on Sept. 15 said crude inventories fell 9.5 million barrels, rather than increased as analysts expected.
Brent crude futures rose 85 cents, or 2.1%, to $41.38/bbl by 7:15 a.m. CT (12:15 GMT), while WTI crude added 88 cents, or 2.3%, to $39.16. Both futures contracts rose by more than 2% on Sept. 15.
"Overnight, the API provided a further injection of bullish impetus," said Stephen Brennock of oil broker P.M. "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 stockpile although refineries were also closed, cutting demand. Official Energy Information Administration stocks data, which does not always confirm the API figures, is due at 9:30 a.m. CT (14:30 GMT).
"Oil prices were lent further support by the API and the weather," said Commerzbank analyst Eugen Weinberg. "Despite an unfavorable fundamental and technical backdrop."
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. OPEC 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 Sept. 17 and is unlikely to recommend further output curbs despite the price drop, sources told Reuters.
Of the companies allowed to take part in the auction, 15 were previously authorized. French company Maurel & Prom was the only successful new company.
The oil and gas rig count rose five to 287 in the week to Oct. 23, its highest since May, energy services firm Baker Hughes Co. said in its weekly report.
Occidental Bone Spring completions, EOG Niobrara producers at a Johnson County wellpad in Wyoming plus commingled Woodford/Hayes wells reported by Calyx Energy top this week’s drilling activity highlights from around the world.