Oil futures moved higher early Thursday as traders awaited official data on U.S. inventories and a large of chunk of output in the Gulf of Mexico remained offline in the wake of Hurricane Ida.
West Texas Intermediate crude for October delivery rose 47 cents, or 0.7%, to $69.77 a barrel on the New York Mercantile Exchange. November Brent crude, the global benchmark, was up 52 cents, or 0.7%, at $73.12 a barrel on ICE Futures Europe.
More gains for crude could be in store “because there appears to be no end just now to the reports of supply outages,” said Carsten Fritsch, analyst at Commerzbank, in a note.
The U.S. Bureau of Safety and Environmental Enforcement late Wednesday estimated around 77% of oil and natural-gas production in the Gulf of Mexico remains shut in. Hurricane Ida, a deadly and powerful storm, made landfall on the Louisiana Gulf Coast on Aug. 29, also forcing the closure of refineries, several of which have reopened.
The Gulf closures equate to a daily production loss of 1.4 million barrels, Fritsch said, noting that it’s “still taking production considerably longer to normalize again after Hurricane Ida than it did after Hurricane Katrina 16 years ago, when 40% of production had already been restored by this time.”
The American Petroleum Institute reported late Wednesday that U.S. crude supplies fell by 2.9 million barrels for the week ended Sept. 3, according to sources. The API, which released its data a day later than usual due to Monday’s Labor Day holiday, also reportedly showed an inventory decline of 6.4 million barrels for gasoline, while distillate stockpiles fell by about 3.7 million barrels.
Crude stocks in Cushing, Okla., the delivery hub for Nymex oil futures, edged up by 1.8 million barrels for the week, sources said.
Official inventory data from the Energy Information Administration will be released Thursday. On average, the EIA is expected to show crude inventories down by 7.4 million barrels, according to a survey of analysts conducted by S&P Global Platts. The survey also calls for supply declines of 2.4 million barrels for gasoline, and 2 million barrels for distillates.