Oil prices continued their ascent on Wednesday, buoyed by significant industry data indicating a substantial reduction in crude inventories within the United States – the world’s foremost fuel consumer. Meanwhile, concerns stemming from an active hurricane in the Gulf of Mexico added an element of uncertainty, keeping investors cautious.
As of 0415 GMT, Brent crude futures for October showcased a climb of 31 cents, equivalent to 0.36%, reaching $85.80 per barrel. The impending expiration of the October contract on Thursday led to an increased focus on the more active November contract, which stood at $85.23 a barrel, reflecting a gain of 32 cents, according to Reuters.
In parallel, U.S. West Texas Intermediate (WTI) crude futures experienced an upswing of 38 cents, translating to 0.47%, reaching $81.54 per barrel. This marked the fifth consecutive session of gains for WTI futures.
A pivotal catalyst in the recent surge came on Tuesday, as both benchmarks soared over a dollar per barrel. This upward trajectory coincided with a slide in the U.S. dollar following the easing prospects of additional interest rate hikes. The shift was prompted by a moderation in U.S. job data.
Underscoring this momentum, data from market sources, citing figures from the American Petroleum Institute, revealed a noteworthy decline of approximately 11.5 million barrels in U.S. crude stocks for the week ending on August 25th. This marked a considerable deviation from the 3.3 million barrel draw estimated by analysts polled by Reuters prior to the data release.
Toshitaka Tazawa, an analyst at Fujitomi Securities Co Ltd, emphasized the positive implications of this larger-than-anticipated draw in U.S. crude oil stockpiles, suggesting robust demand within the oil market.
Simultaneously, investors demonstrated an increased interest in futures due to concerns revolving around Hurricane Idalia. The storm’s presence in the Gulf of Mexico, east of major U.S. oil and natural gas production sites, elicited apprehensions across the industry.
