Oil rises more than 1% after falling due to falling US inventories and support from storms

Oil rose more than 1% on Wednesday, paring some of the previous day’s losses, due to a drop in U.S. crude inventories and concerns about Hurricane Francine The halt in US production offset concerns about weak global demand.

U.S. crude oil inventories fell by 2.793 million barrels, gasoline Crude inventories fell by 513,000 barrels and distillate inventories rose by 191,000 barrels, according to market sources citing last week’s data. American Petroleum Institute Tuesday’s figures.

At 0807 GMT, Brent crude futures were up $1.10, or 1.6 percent, at $70.29 a barrel, while U.S. crude futures were up $1.11, or 1.7 percent, at $66.86.

“The API provided some comfort, showing a sizable decline in crude oil stocks, a stronger-than-expected drawdown in gasoline stocks and a small increase in distillate inventories,” he said. Tamas Varga from the PVM oil corridor.

Both oil benchmarks plunged on Tuesday, with Brent falling below $70 to its lowest level since December 2021 and U.S. crude falling to its lowest level since May 2023, after OPEC revised down its oil demand growth forecast for 2024 for the second time.

Concern over production disruption from Hurricane Francine USAThe world’s largest producer, also provided support, other analysts said. “The market recovered autonomously as Tuesday’s drop was substantial,” he said. Yuki Takashimaeconomist in Nomura Securitiesand fears of supply disruption from Francine also provided support. Around 24% of crude production and 26% of natural gas departure in the US Gulf of Mexico were out of service due to the storm, the US Bureau of Safety and Environmental Enforcement (BSEE) said Tuesday.

Following Tuesday’s report from industry group API, official U.S. government inventory figures are due at 1430 GMT.

Eleven analysts polled by Reuters estimated on average that crude inventories rose by about 1 million barrels and gasoline stocks fell by 0.1 million barrels.