Oil and gasoline futures pulled back Wednesday, a day after hitting five-month highs, as Hurricane Laura forced the shutdown of most Gulf of Mexico crude output and traders awaited the latest figures on U.S. petroleum inventories.
West Texas Intermediate crude for October delivery
was down 18 cents, or 0.4%, at $43.17 a barrel on the New York Mercantile Exchange. October Brent crude
the global benchmark, fell 7 cents, or 0.2%, to $46.22 a barrel on ICE Futures Europe.
“With more than 1.5 million barrels a day being taken offline in anticipation of the storms, crude prices inched up,” said Craig Erlam, senior market analyst at Oanda, in a note. “Whether they will be sustained may depend on the level of damage that’s sustained and how long it will take the facilities to get back up and running again,” he said. “We haven’t seen as big a surge in oil prices as we may have otherwise seen but this isn’t exactly an undersupplied market.”
Laura is now forecast to be a catastrophic category 4 hurricane, the National Hurricane Center said Wednesday. It is forecast to produce a “life-threatening” storm surge, extreme winds and flash floods over Eastern Texas and Louisiana later on Wednesday.
The Bureau of Safety and Environmental Enforcement late Tuesday estimated that 84.3% of the current oil production in the Gulf of Mexico has been shut in, along with around 60.9% of natural-gas output.
U.S. oil inventory data will also be in focus. The American Petroleum Institute reported late Tuesday that U.S. crude supplies fell by 4.5 million barrels for the week ended Aug. 21, according to sources. The API data also showed gasoline stockpiles dropped by 6.4 million barrels, while distillate inventories were up by nearly 2.3 million barrels. Crude stocks at the Cushing, Okla., storage hub, meanwhile, edged down by 646,000 barrels for the week, sources said.
More closely followed inventory data from the Energy Information Administration will be released Wednesday. The EIA data are expected to show crude inventories fell by 4.3 million barrels last week, according to analysts polled by S&P Global Platts. They also forecast supply declines of 2.7 million barrels for gasoline and 700,000 barrels in distillates.
October natural-gas futures
rose 1.3% to $2.63 per million British thermal units.