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Oil prices steady as U.S. storm threat wanes

CommoditiesSep 16, 2021 03:11PM ET
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© Reuters. FILE PHOTO: Crude oil storage tanks are seen in an aerial photograph at the Cushing oil hub in Cushing, Oklahoma, U.S. April 21, 2020. REUTERS/Drone Base/File Photo

By Devika Krishna Kumar

NEW YORK (Reuters) -Oil prices steadied on Thursday after hitting a multi-week high a day earlier as the threat to U.S. Gulf crude production from Hurricane Nicholas receded.

Brent crude ended the session up 21 cents, or 0.3%, at $75.67 a barrel. On Wednesday Brent touched $76.13, its highest since July 30.

U.S. West Texas Intermediate (WTI) ended the session unchanged at $72.61 a barrel after climbing to the highest since Aug. 2 on Wednesday.

"With prices now back around summer highs, we are seeing some profit taking kicking in, but the rally continues to look well supported," said Craig Erlam, senior market analyst at OANDA.

U.S. Gulf energy companies have been able to restore pipeline service and electricity quickly after Hurricane Nicholas passed through Texas early this week, allowing them to focus on efforts to repair the damage caused weeks earlier by Hurricane Ida.

"As Nicholas spared U.S. production from further disruptions, it is difficult to see how oil prices can increase further in the near term," said Rystad Energy analyst Nishant Bhushan. "Ida-affected oil production capacity continues to recover in the U.S."

Oil jumped on Wednesday, supported by figures showing U.S. crude inventories fell by a bigger-than-expected 6.4 million barrels last week, with offshore oil facilities still recovering from Ida's impact. [EIA/S]

Brent has rallied about 45% this year, supported by supply cuts by the Organization of the Petroleum Exporting Countries (OPEC) and its allies, plus some recovery from last year's pandemic-related collapse in demand.

Oil is also finding support from a surge in European power prices, which have soared because of factors including low gas inventories and lower-than-normal gas supply from Russia.

Benchmark European gas prices at the Dutch TTF hub have risen by more than 250% since January.

The price surge and impact on oil "is a situation that I believe will get much worse before it gets better," said Jeffrey Halley, an analyst at OANDA.

Adding to signs of oil demand recovery, closely watched OPEC and International Energy Agency reports this week said global oil use would rise above 100 million barrels per day, a level last reached in 2019, as soon as next year's second quarter.

"Although much of the OPEC and IEA adjustments are longer-term in nature, they are nonetheless worthy of some buying interest despite significant demand risk across the balance of this year related to the Delta variant (of the coronavirus,)" said Jim Ritterbusch, president of Ritterbusch and Associates in Galena, Illinois.

Oil prices steady as U.S. storm threat wanes
 

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Comments (5)
perplexed76 .
perplexed76 . Sep 16, 2021 8:58AM ET
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oil "investors" in deep sorrow
Joe Marie Lichangco
Joe Marie Lichangco Sep 16, 2021 6:00AM ET
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up or down this week?
New Jazenevd
New Jazenevd Sep 16, 2021 5:39AM ET
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West’s ruling elites, aka liberal traitors, destroyed  energy industries in own countries. What’s going to happen with consumer energy prices after this? Of course, lying media will continue pushing smoke & mirrors stories without telling the truth.
Nice Direction
Nice Direction Sep 16, 2021 1:37AM ET
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why WTI USD up
TARA CHAND AGRAWAL
TARA CHAND AGRAWAL Sep 15, 2021 10:29PM ET
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PRICE of CRUDE will soon fall BELOW USD 66.60 When USA demand falls after Texas refinery starts in full swing.
perplexed76 .
perplexed76 . Sep 15, 2021 10:29PM ET
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you don't know gamblers
John Eisenbeiser
John Eisenbeiser Sep 15, 2021 10:29PM ET
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Refining products puts a demand on WTI. Product demand is at precovid levels and increasis year over year.
 
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