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Oil slips but holds to most gains after draw in U.S. stocks By Reuters

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© Reuters. FILEPHOTO: A photograph of crude oil storage tanks is taken from above at Cushing Oil Hub in Cushing (OK), U.S.A. April 21, 2020. REUTERS/Drone Base/File Photo

By Jessica Jaganathan

SINGAPORE (Reuters) – Oil prices slipped on Thursday, but kept most of the previous day’s gains after a larger-than-expected drawdown in crude oil stocks in the United States, the world’s largest oil consumer.

The price of a barrel fell 0.2% to $75.33 by 0128 GMT after rising 2.5% over the previous day.

U.S. West Texas Intermediate oil (WTI) fell 0.2% to $72.49 on Wednesday, after closing 3.1% lower.

According to the Energy Information Administration (EIA), oil and fuel stocks dropped last week as oil refiners and offshore oil facilities were still recovering after Hurricane Ida. [EIA/S]

According to the EIA, crude oil inventories decreased by 6.4million barrels over the week ending Sept. 10, from 417.4million to 417.4million. That is compared to a Reuters poll that predicted a drop of 3.5 million barrels.

Analysts at ANZ Research stated in a Thursday note that the data were based on warnings by the International Energy Agency (IEA) about the possibility of supply losses from hurricanes in the Gulf of Mexico. This would negate gains made from OPEC.

Global supply fell for the first times in five months after the storm, but the market should return to normal in October, as the Organization of the Petroleum Exporting Countries and its allies like Russia, a group known as OPEC+ will continue plans to increase supplies.

U.S. Gulf Energy companies managed to rapidly restore power and pipe service after Hurricane Nicholas passed through Texas. They were then able increase efforts to address the larger damage that Ida caused.

Nicholas caused small flooding and power outages throughout Texas and Louisiana. However, some of the refineries were still offline after Category-4 Hurricane Ida.

An earlier storm had shut off a significant portion of U.S. Gulf Offshore Oil and Gas Production. According to the Bureau of Safety and Environmental Enforcement, about 30% of U.S. Gulf oil and gas production was still shut down as of Wednesday.

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