- US crude inventories fall to lowest since October 2018, according to EIA
- High natgas prices support the rise
- OPEC + strives to keep prices around $ 70, Iraqi minister says
NEW YORK, Sept. 23 (Reuters) – Oil prices rose on Thursday as Brent crude hit its highest level in more than two months, supported by rising fuel demand and lower U.S. crude inventories as production was remained hampered in the Gulf of Mexico after two hurricanes.
Supply issues have caused funds to take longer positions, analysts said.
Brent crude was up $ 1.06, or 1.4%, to $ 77.25 a barrel, its highest price since mid-July. U.S. West Texas Intermediate (WTI) crude rose $ 1.07, or 1.5%, to $ 73.30 a barrel.
“Reality is setting in – there is more and more talk about the global tightening of stocks and there are concerns about supply issues ahead of winter,” said Phil Flynn, senior analyst at Price Futures. Group in Chicago. Further support could come as the White House takes a tougher line on Iran, he said.
On Wednesday, both contracts jumped 2.5% after the US Energy Information Administration announced that US crude inventories in the week to September 17 fell 3.5 million barrels to 414 million – the lowest since October 2018.
Also supporting prices, some members of the Organization of the Petroleum Exporting Countries (OPEC) and its allies have struggled to increase production after years of underinvestment or delays in maintenance work during the pandemic. Read more
The Iraqi oil minister said on Wednesday that OPEC + was working to keep crude near $ 70 a barrel as the global economy recovered. The group will meet on October 4.
Iran’s export capabilities depend in part on relaunching its 2015 nuclear deal. The window has remained open but Tehran has not indicated whether it is willing to resume talks in Vienna, a senior official said. American official. Read more
The dollar, which generally has an inverse relationship to commodity prices, eased from a one-month high after the Federal Reserve signaled it would soon start cutting its monthly bond purchases and prepare the ground for higher interest rates next year, while leaving room for much needed slowing down. Read more
The US central bank “has signaled in advance its intention to cut spending, confirming its economic optimism, which ultimately points to robust US oil demand,” said Barbara Lambrecht, analyst at Commerzbank.
Oil prices were also buoyant as concerns eased over a possible short-term default by Chinese property developer China Evergrande on its dollar bonds. Read more
A sign of strengthening demand for fuel, utilization rates at refineries on the U.S. east coast have reached 93%, the highest since May 2019, according to EIA data. Soaring natural gas prices are also supporting market sentiment, ANZ Research said.
“The shortage of gas could prompt power companies to switch from gas to oil if the winter turns colder this year,” ANZ analysts wrote in a note.
Natural gas prices have risen around the world in recent months due to factors such as increased demand, especially from Asia as it recovers from the pandemic, low stocks of gas and Russia’s limited gas supply. Read more
Reporting by Jessica Resnick-Ault in New York and Bozorgmehr Sharafedin in London, Additional reporting by Sonali Paul in Melbourne and Koustav Samanta in Singapore Editing by David Gregorio and Matthew Lewis
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