Oil holding five-month highs ahead of US EIA crude inventories report
Crude and Brent oil spiked to fresh five-month highs yesterday and have continued to trade around those levels as stormy weather threatens US supply and recent data points to high demand.
Both benchmarks are flat today after opening just below recent highs – yesterday saw crude climb over 2% to hit $43.62, while Brent spiked to $46.50.
Crude oil gains as Hurricane Laura threatens production in the Gulf of Mexico
US oil producers in the Gulf of Mexico have been forced to shut down around 85% of their oil output due to the approach of Hurricane Laura. 15 years ago Hurricane Katrina forced 90% of production to close.
Hundreds of workers have been evacuated from the region and output has dropped by nearly 1.6 million barrels per day as a result of the shutdowns.
While the hit to supply is likely to only be temporary, it has still given crude oil and Brent oil a boost.
Another forecast beating API drawdown boosts crude oil
The latest crude oil inventories report from the American Petroleum Institute has once again revealed a larger than expected drawdown in stocks.
Inventories fell by 4.524 million barrels during the week ending August 21st, beating analysts’ expectations of a 3.694 million barrel decline. The previous week oil stocks had fallen by 4.264 million barrels, versus predictions of a 2.670 million barrel drop.
Further improving sentiment was a forecast beating draw of gasoline, with stockpiles falling 6.392 million barrels during the period against analyst expectations of a 1.533 million barrel decline.
US EIA crude oil inventories data is due out this afternoon. Inventories have fallen for four straight months now. The rate of draw has slowed sharply, but will the official figures confirm the API data, breaking that trend?