Crude oil rallies above $70 as another hurricane menaces Texas

Image: Apache

Oil rose for a third day as another storm menaced a key U.S. energy hub just weeks after Hurricane Ida hammered local output.

West Texas Intermediate advanced 0.7 per cent to $70.95/bbl at 11:37 a.m. London time. Brent for November settlement rose 0.8 per cent to $74.09/bbl.

The latest system, Nicholas, made landfall in Texas, posing a threat to coastal refineries and petrochemical facilities. 

Global oil supplies fell by 540,000 bbls/d in August amid unexpected disruptions and will be flat this month, according to the International Energy Agency. The world will have to wait until October for extra supply as output losses from Ida wipe out increases from OPEC+, the IEA said in a report.

In an indication of the tightening market, global inventories that ballooned during the pandemic have shrunk back to the lowest level in 20 months. About 2.97 billion barrels of crude were stored at onshore facilities as of Sept. 5, the least since January 2020, according to data analytics firm Kayrros.

“Oil outages continue to remain, with another tropical storm on its way,” said Keshav Lohiya, chief executive officer of Oilytics. “Short-term bullishness continues to remain the focus for oil markets.”

© 2021 Bloomberg L.P.

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