Adedapo Adesanya
By Adedapo Adesanya
Oil prices were up on Thursday following a weaker Dollar and a bigger-than-expected fall in crude stocks in the United States.
Brent crude rose 48 cents or 0.46 per cent yesterday to settle at $72.89 a barrel, while the US West Texas Intermediate (WTI) crude went up by 56 cents or 0.79 per cent to settle at $69.83 a barrel.
The increase this week has been mostly based on a falling US Dollar, which makes oil cheaper in other currencies.
In the United States, crude inventories dropped by 7.2 million barrels last week, the US Energy Information Administration (EIA) said on Wednesday. This is compared with a crude oil inventory draw of 3 million barrels estimated by the EIA for the previous week and analyst expectations for a draw of 2.83 million barrels.
The refineries in Louisiana that were shut ahead of or during the passing of Hurricane Ida this weekend could take weeks to restart as power and water services have yet to be restored in the state’s Gulf Coast.
The hurricane has shut about 80 per cent of the Gulf of Mexico’s oil and gas output. Refiners may take longer to restart facilities, especially if power outages in Louisiana persist.
Offsetting the supply impact, oil demand has been curbed as extended power outages are slowing the reopening of refineries that were shut in Louisiana.
In addition, the number of Americans filing new claims for jobless benefits fell last week, while layoffs in August dropped to their lowest level in more than 24 years, suggesting the labour market was charging ahead despite new COVID-19 infections.
The market was also optimistic about the global economic recovery as the Organisation of the Petroleum Exporting Countries and allies (OPEC+) raised its demand forecast for 2022.
On Wednesday, the group agreed to continue a policy of phasing out record production reductions by adding 400,000 barrels per day. It did not take up requests from the United States to accelerate the removal of those supply curbs.
