More details awaiU.S. crude oil climbed more than $2 a barrel on Wednesday, driven by fears of lengthy production shutdowns in the offshore oil patch, which Hurricane Francine was barreling through on Wednesday.
Brent crude futures were up $1.87, or 2.70%, to $71.06 a barrel
U.S. crude futures gained $2.05, or 3.12%, to $67.80.
Oil prices shook off an increase in crude inventories reported by the U.S. Energy Information Administration (EIA).
Crude inventories rose by 833,000 barrels to 419.1 million barrels in the week ending Sept. 6, the EIA said, compared with analysts’ expectations in a Reuters poll for a 987,000-barrel rise.
Crude stocks at the Cushing, Oklahoma, delivery hub (USOICC=ECI), opens new tab fell by 1.7 million barrels in the week.
“A rather unexciting minor build to crude inventories has been overshadowed by yet one more draw at Cushing,” said Matt Smith, lead oil analyst for Kpler. “EIA data show Cushing inventories now drawing nine of the last 10 weeks, down to the lowest level since early November last year.”
Both oil benchmarks tanked on Tuesday, with Brent falling below $70 to its lowest price since December 2021 and U.S. crude dropping to its lowest since May 2023, after OPEC revised down its 2024 oil demand growth forecast for a second time.
Concern about Hurricane Francine disrupting output in the U.S., the world’s biggest producer, also lent support, other analysts said.
“The market rebounded autonomously, as Tuesday’s drop was substantial,” said Yuki Takashima, an economist at Nomura Securities, citing fears Francine would disrupt supply.
About 24% of crude production and 26% of natural gas output in the U.S. Gulf of Mexico was offline due to the storm, the U.S. Bureau of Safety and Environmental Enforcement said on Tuesday.