NEW YORK, Sept 28 (Portal) – Oil prices rose on Wednesday after unexpected falls in US crude and fuel inventories, outweighing downward pressure from continued US dollar strength.
Brent crude futures were up $2.33, or 2.7%, to $88.60 a barrel by 11:05 a.m. EST (1505 GMT). US West Texas Intermediate (WTI) crude oil futures were up $2.60, or 3.3%, to $81.10 a barrel.
US crude inventories fell 215,000 barrels last week, while gasoline inventories fell 2.4 million barrels and distillate inventories fell 2.9 million barrels as refining activity slowed after multiple outages.
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Product supply increased last week as demand picked up after a few weeks of weakness. Refining activity declined, but refiners are still operating at 90.6% of total capacity in the United States, the highest for this time of year since 2014, on both domestic and export demand.
“If we can hold onto these gains, it looks like the market has made a small bottom here,” said Phil Flynn, an analyst at Price Futures Group in Chicago.
In the Gulf of Mexico, about 190,000 barrels of oil per day, or 11% of total Gulf production, were shut down due to Hurricane Ian, according to the US government. Wholesale gasoline prices also rose in the United States after refineries shut down in the Midwest and West Coast.
Goldman Sachs on Tuesday lowered its 2023 oil price forecast on expectations of weaker demand and a stronger US dollar, but said global supply disappointments only reinforced its long-term optimistic outlook.
The dollar hit a new two-decade high against a basket of currencies on Wednesday, as rising global interest rates fueled recession fears. A strong dollar reduces demand for oil by making it more expensive for buyers using other currencies.
Global equities hit a two-year low on Wednesday after the Bank of England announced it would enter the bond market in a bid to stem a damaging rise in borrowing costs, dampening investor fears of contagion across the financial system.
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The producer group OPEC+ will meet on October 5, where Russia is likely to propose a production cut of about 1 million barrels a day, a source familiar with Russian thinking said on Tuesday.
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Reporting by David Gaffen; Additional reporting by Shadia Nasralla in London; Edited by Lisa Shumaker and David Gregorio
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David Gaff