By Gina Lee
Investing.com – Oil was up on Wednesday morning in Asia after the American Petroleum Institute (API) announced a larger-than expected draw in crude oil inventory.
API reported on Tuesday a 6.360 million-barrel draw for the week ended August 28, much larger than the forecasted 1.950 million-barrel prepared by Investing.com, and the previous week’s 4.524 million-barrel draw.
Investors will now be looking at the U.S. Energy Information Administration’s figures on crude oil supply, due later in the day.
Brent oil futures rose 0.81% to 45.95 by 10:03 PM ET (3:03 AM GMT) and WTI futures gained 0.84% to $43.12.
Also supporting oil was better-than-expected U.S. manufacturing activity data released on Tuesday. August’s ISM Manufacturing Purchasing Managers Index (PMI) rose to 56, beating July’s reading of 54.2 and the 54.5 forecast. A rise in new orders saw the index climb to its highest level in more than a year.
“A positive tone was set by hopes for a swift economic recovery following healthy U.S. economic data, which raised investors’ risk appetite and propelled U.S. stock market and oil prices,” Fujitomi Co chief analyst Kazuhiko Saito told Reuters.
But he warned, “slower-than-expected resumption of oil output in the United States after Hurricane Laura raised concerns over tighter supply.”
Output in the Gulf of Mexico is slowly recovering as activity resumes, but was down was down by 525,099 barrels per day, or 28.4% of the region’s daily production, on Tuesday. Of the 643 manned platforms in the Gulf of Mexico, 71 remain closed in the aftermath of the storm that hit the region last week, down from 117 platforms on Monday.
Meanwhile, the Organization of the Petroleum Exporting Countries (OPEC) said that its oil output reportedly rose by around 1 million barrels per day (bpd) in August. A sharp drop in fuel demand due to COVID-19 prompted OPEC+ to cut production by a record 9.7 million bpd from May 1, but this cut was eased to 7.7 million bpd from August 1., with the eased cuts to remain in place until December.