Oil up Modestly Ahead of U.S. Inventory Data By Investing.com
By Barani Krishnan
Investing.com – Global oil markets put in a modest recovery on Tuesday after a 2% tumble in the previous session, as investors awaited U.S. inventory data that would point to demand in a market still struggling to return to optimal output after Hurricane Ida.
New York’s benchmark oil price, WTI, was at $70.49 per bar, an increase of 35 cents or 0.5%. WTI lost 2.3% Monday.
London-traded crude, the global benchmark for oil, finished the session at $74.36, up 44 cents, or 0.6%. Brent fell 1.9% over the preceding session.
Crude tumbled with other major risk assets on Monday as a debt crisis at Chinese property giant Evergrande sparked concerns about spillover risks in the world’s second-largest economy.
“Crude seems like it is forming a trading range here and a further consolidation seems likely until China slowdown concerns disappear,” said Ed Moya, analyst at online trading platform OANDA.
Tuesday’s modest recovery in crude came as investors awaited a weekly snapshot on U.S. inventories from the American Petroleum Institute.
API will release its log of U.S. crude oil, gasoline, and distillate stocks for the week ending Sept. 17 at 4:30PM ET (20:30 GMT). These numbers are used as precursors to Wednesday’s official weekly inventory data, due from the EIA or U.S. Energy Information Administration.
Analysts tracked by Investing.com have forecast that fell by 2.44 million barrels last week, compared with the previous week’s draw of 6.42 million.
According to forecasts, inventories will likely fall by 1.07 million barrels following a drop in 1.86 million the week prior.
After a 1.69 million deficit the previous week, stockpiles are expected to be down by 1.19million barrels.
Meanwhile, some 17% of oil output in the United States remain shut-in after last month’s Hurricane Ida, the Bureau of Safety and Environmental Enforcement said on Tuesday.
The BSEE responsible for monitoring the situation said that oil production from the U.S. Gulf Coast has been reduced to 320,909 barrels.
25 percent of regional gas output, representing 566.67 Million cubic feet of daily production, were also not recovered, according to the agency.
Ida caused the protection shut down of over 90% of the oil and gas production in the Gulf before it made landfall on August 29. Although it was later downgraded from a hurricane to a tropical storm, the facilities that were shut down for Ida have struggled to return to their full capacity.
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