Oil prices rose around 2% on Wednesday after industry data showed U.S. inventories fell more than expected, while major U.S. producers evacuated rigs in the Gulf of Mexico ahead of a storm.
U.S. West Texas Intermediate (WTI) crude futures Clc1 climbed $1.13 to $58.96 by 0947 GMT, after hitting a session high of $59.18.
Brent crude futures LCOc1 were up $1.14 at $65.30, down from a session high of $65.47.
Data from the American Petroleum Institute (API) on Tuesday showed U.S. crude inventories fell by 8.1 million barrels in the week to July 5 to 461.4 million, compared with analyst expectations for a decrease of 3.1 million barrels. [API/S]
Official figures from the government’s Energy Information Administration (EIA) are due later on Wednesday.
“Prices are finely balanced right now as investors await fresh stimulus,” said Fawad Razaqzada, technical analyst at FOREX.com. “The stimulus could come in the form of a sharp change in U.S. crude oil inventories.”
Meanwhile big oil companies began evacuating and shutting in production in the Gulf of Mexico after weather forecasts warned that a tropical disturbance might become a storm later on Wednesday or Thursday.
Chevron Corp (CVX.N), Royal Dutch Shell Plc (RDSa.L), BP Plc (BP.L) and BHP Group Ltd (BHP.AX) are removing staff from 15 offshore energy platforms. Exxon Mobil Corp (XOM.N) said it was “closely monitoring” the disturbance to determine if its facilities might be affected.
The Gulf of Mexico is home to 17% of U.S. crude oil output which stands at around 12 million barrels per day (bpd).
“Assuming that it [the storm] will cause some evacuations, then you would expect it to have a limited short-term impact but perhaps it’s a bit too early to say” said Paul Horsnell, head of commodities research at Standard Chartered.
(For a graphic on ‘U.S. crude inventories, weekly changes since 2017’ click tmsnrt.rs/2XlX17b)
The U.S. and global benchmarks have gained this year as the Organization of the Petroleum Exporting Countries (OPEC) and big producers such as Russia have curbed output to bolster prices.
The alliance, known as OPEC+, agreed last week to extend their supply-cutting deal until March 2020. Tensions around Iran’s nuclear program and recent incidents involving oil tankers have also supported prices.
Iran’s President Hassan Rouhani said on Wednesday Britain would face “consequences” over the seizure of an Iranian oil tanker near the coast of Gibraltar last week.
Oil prices have been under pressure from uncertainty over the outlook for global economic growth because of fallout from the U.S.-China trade war as well as record oil supply growth.
The EIA on Tuesday revised its U.S. crude oil production forecast for 2019 to an all-time high of 12.36 million bpd.