Oil edged higher as positive European manufacturing data and rising equity markets gave some respite to recent demand worries.
Futures in New York for November delivery rose to over $40 a barrel. The German economy continues to recover thanks to stronger-than-expected manufacturing figures, data showed, while equity markets in Europe are also stronger. Citgroup Inc. said it remains bullish on the outlook for oil, though the market is undergoing a fitful rebalancing.
The American Petroleum Institute reported crude stockpiles increased by nearly 700,000 barrels last week, while gasoline inventories shrunk by 7.7 million barrels, according to people familiar, ahead of government data later.
After a partial recovery this month, oil prices are now back in the same range as during the northern hemisphere’s summer. With the demand outlook deteriorating in recent weeks, attention is now turning to the OPEC+ alliance and whether it will try to curb output further to rebalance the market.
“The API was positive I’d say with draws in gasoline and distillates and crude unchanged,” said Bjarne Schieldrop, chief commodities analyst at SEB AB. “A large draw down in the fourth quarter or not is the big question.”
- West Texas Intermediate for November rose 0.6 per cent to $40.03 a barrel as of 10:01 a.m. in London
- Brent for November gained 0.5 per cent to $41.94 a barrel
Libya, meanwhile, is signaling that it will return some supply back to the market, lifting force majeure restrictions at its Zueitina export terminal and evaluating the security situation at other ports, according to National Oil Corp.
On the U.S. Gulf Coast, Tropical Depression Beta has flooded Houston, but is weakening as it heads toward Louisiana. The storm isn’t expected to cause many issues for onshore refineries, and interruptions to offshore rigs aren’t likely to be long-lasting either.
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