A pump jack is seen at sunrise near Bakersfield, California, October 14, 2014. Portal/Lucy Nicholson/File Photo Acquire License Rights
- Crude oil inventories down 11.5 million barrels -API
- Official Saudi retail prices for October are expected to rise
LONDON, Aug 30 (Portal) – Oil prices continued gains on Wednesday after industry data showed a sharp drop in crude stocks in the US, the world’s biggest fuel consumer, and a hurricane in the Gulf of Mexico kept investors on edge.
October Brent crude futures rose 42 cents, or 0.49%, to $85.91 a barrel by 0748 GMT. The October contract expires on Thursday and the more active November contract was at $85.32, up 41 cents.
U.S. West Texas Intermediate crude futures rose 50 cents, or 0.62%, to $81.66.
Both benchmarks rose more than a dollar on Tuesday as the US dollar weakened after the prospect of further rate hikes faded after weaker US jobs data.
US crude inventories fell by a more than expected 11.5 million barrels in the week ended August 25, market sources said, citing figures from the American Petroleum Institute on Tuesday.
The decline indicates strong demand, said Toshitaka Tazawa, an analyst at Fujitomi Securities.
Investors were also keeping an eye on Hurricane Idalia, which is sweeping across the Gulf of Mexico east of major US oil and gas producing locations. According to the Energy Information Administration, the region accounts for about 15% of U.S. oil production and about 5% of natural gas production.
Oil giant Chevron Corp (CVX.N) evacuated some employees from the region but production continued.
Elsewhere, analysts expect Saudi Arabia, the world’s largest oil exporter, will extend its voluntary production cut until October, leaving oil supplies tight.
Based on that expectation, refining sources polled by Portal forecast that Saudi Arabia’s official selling prices for all crude grades sold to Asia in October will be raised to their highest level this year.
Meanwhile, the military seized power in Gabon on Wednesday, which could hit the country’s crude supplies and further tighten the market. Gabon exported an average of 160,000 barrels per day to Asia monthly from May to July, Kpler ship tracking data showed.
However, gains in oil were limited by concerns over fuel demand and the mixed economy in China, the world’s largest oil importer.
Reporting by Paul Carsten in London, Yuka Obayashi in Tokyo and Trixie Yap in Singapore. Editing by David Goodman
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