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Oil settles up 3%, boosted by Mexican oil rig outage, U.S. vaccine approval

CommoditiesAug 24, 2021 04:51PM ET
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© Reuters. FILE PHOTO: A sticker reads crude oil on the side of a storage tank in the Permian Basin in Mentone, Loving County, Texas, U.S. November 22, 2019. REUTERS/Angus Mordant

By Jessica Resnick-Ault

NEW YORK (Reuters) -Oil prices rose 3% on Tuesday, supported after Mexico suffered a large production outage due to a fire on an oil platform and also by full U.S. regulatory approval of vaccines for COVID-19.

Brent crude oil futures settled up $2.30, or 3.4%, at $71.05 a barrel, while U.S. West Texas Intermediate (WTI) gained $1.90, or 2.9%, to settle at $67.54.

Oil is up more than 8% for the week, clawing back the 7.6% lost last week, the biggest weekly decline in more than nine months.

Investors took a more upbeat view on the continued fight against the virus after the U.S. Food and Drug Administration on Monday issued full approval for the Pfizer/BioNTech two-dose vaccine, having authorized it for emergency use last December.

Analysts said China's apparent success in fighting the Delta variant of the coronavirus also boosted demand sentiment, with no cases of locally transmitted infections in the latest data.

"Concerns are easing that we will not see a global shutdown due to the Delta variant," said Gary Cunningham, director of market research at Tradition Energy in Stamford, Connecticut.

Also supporting oil prices, a fire on an oil platform off Mexico on Sunday has cut state-run Pemex's oil production by about 25% since then. Five workers died and the fire halted 421,000 barrels per day of production.

Prices of heavy sour crude oil grades are rising on the U.S. Gulf Coast, traders said, as the market braces for a disruption of supplies from Mexico.

"The market is getting a tailwind from the PEMEX fire, which has greenlighted this rally," said Bob Yawger, director of energy futures at Mizuho in New York.

Still, Yawger cautioned that the market could reverse course if U.S. government data on Wednesday shows gasoline inventories increased. Analysts polled by Reuters expect gasoline inventories to fall, but Yawger expects a gain, which could signal a demand lull. [EIA/S]

Data from trade group the American Petroleum Institute on Tuesday showed crude inventories fell 1.6 million barrels, while gasoline stockpiles fell 1 million barrels, traders said. Prices were little changed in post-settlement trade following the data. Official data from the Energy Information Administration is due to be released on Wednesday at 10:30 a.m. ET (1430 GMT).

The U.S. Department of Energy on Monday said it would sell up to 20 million barrels of crude from the Strategic Petroleum Reserve (SPR) oil stocks to comply with legislation, with deliveries to take place between Oct. 1 and Dec. 15.

Meanwhile, Indian refiners' crude throughput in July bounced to its highest in three months as fuel demand rebounded and buoyed prices.

Oil settles up 3%, boosted by Mexican oil rig outage, U.S. vaccine approval
 

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Comments (7)
Salvador Hernández Sánchez
Salvador Hernández Sánchez Aug 24, 2021 5:23PM ET
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Yes is absurd, one day there covid one day not, one week down 9% , another day growth 6 % and another 3 %. Now sell massive in protest
Coffee Boy
Coffee Boy Aug 24, 2021 4:01AM ET
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Very interesting since when does the coronavirus determine oil prices? This is absurd! In 1 day, the coronavirus appeared in China, and in a day it disappeared, where is the logic? The answer is simple: "The accident on the Mexican platform intensified the oil price rebound. :))
Filipe Pereira
Filipe Pereira Aug 24, 2021 4:01AM ET
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on a hour and half API weekly oil reports that move the price and fast
Eudon Hickey
Eudon Hickey Aug 24, 2021 3:52AM ET
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I like how Reuters turn words around. They write vaccine demand, where in actual fact it should be vaccine hoax.  It is simply mind boggling that the FDA approves this vaccine, where there are clear issues, never completed the full vaccine trials/ phases and also never published the animals testing phases.  Pfizer know how much money they need to pay the wrong person in the right position
Jane Durtev
Jane Durtev Aug 24, 2021 3:52AM ET
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Fake news written by a Trump fascist snd *****
david wright
david wright Aug 24, 2021 3:52AM ET
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Because it is Pfizer, the most honest among the pharma industrial complex. They never cheated, bribed nor faked any trials..
MuraliKrishna Brahmandam
MuraliKrishna Brahmandam Aug 24, 2021 3:34AM ET
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Powell is riding on the stimulus lion; he does not know how to get off the lion and be safe from the lion. sooner or later he will have to get off the lion 🦁 and the lion will get him alive. this type of circus tricks are not without the risks. Monkey rides on lion and gets eaten alive
Desiree Zhu
Desiree Zhu Aug 24, 2021 2:22AM ET
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Please make up some new excuses!
Koketso Tendane
Koketso Tendane Aug 24, 2021 1:31AM ET
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No one believes in the COVID BS anymore!!
Darryl Allen
Darryl Allen Aug 23, 2021 11:19PM ET
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Market Up on Hopes; Down on Fears. More at 11.
Nuage Laboratoire
Nuage Laboratoire Aug 23, 2021 11:19PM ET
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