Oil prices rebounded on Wednesday afternoon (September 1), after a US industry report showed crude inventories fell more than expected last week.
Prices rose ahead of the OPEC+ meeting, where the Organization of the Petroleum Exporting Countries (OPEC), Russia and its allies are expected to meet to discuss plans to add 400,000 bpd (bpd) through December.
Brent crude for November delivery rose 45 US cents, or 0.6%, to touch 72.08 US dollars per barrel, while US crude for October delivery was at 68.95 US dollars per barrel, up 45 cents per barrel. 0.6%.
Tuesday’s report from the American Petroleum Institute (API) showing a larger-than-expected decline in US crude inventories is bullish and supportive, said Avtar Sandu, a senior commodities trader at Phillips Futures said.
U.S. crude inventories fell by 4 million barrels in the week ending Aug. 27, according to two market sources, citing API data on Tuesday.
Ahead of the Energy Information Administration’s weekly report, a Reuters poll of analysts estimated crude inventories would fall by 3.1 million barrels.
However, US crude oil prices are expected to continue to come under pressure as offshore oil and gas production in the Gulf of Mexico is gradually recovering, but refinery operations are likely to take longer to recover. back to normal, analysts said.
Total refining capacity of 2.3 million bpd, or 13% of US capacity, was closed in Louisiana due to Hurricane Ida, the US Department of Energy estimated. At the same time, about 94% of oil and natural gas production remains disrupted in the Gulf of Mexico.
The outage will likely slow the reopening of manufacturing plants, but Exxon Mobil’s 520,000 bpd Baton Rouge XOM.N complex is gearing up to restart on Tuesday.
Although US crude production is expected to increase rapidly again, OPEC+ expects the market to be in deficit at least until the end of 2021, OPEC+ sources said.
“This should give OPEC+ consensus that it can proceed with the planned monthly production increase to 400,000 bpd,” ANZ Research analysts said in a note.
Liquefied natural gas prices in the US increase
U.S. liquefied natural gas (LNG) contracts rose on Tuesday, posting a fifth straight month of gains, ahead of lower output forecasts as traders watched Hurricane Ida’s effect on demand.
“Production numbers are still very low and at this level, prices are unlikely to fall much and there is plenty of room to rise,” said John Abeln, analyst at Refinitiv.
US production is forecast to fall to 89.4 billion cubic feet per day (bcfd) this week from 92.5 bcfd last week.

Gas futures for October delivery rose 7.2US cents, or 1.7%, to $4,377/mmBTU, the highest close since December 2018, despite falling 2% earlier in the session on caution. the impact of Hurricane Ida on demand.
LNG prices have increased by about 12% in August 2021.
Data provider Refinitiv said total US production averaged 91.7 bcfd in August, compared with 91.6 bcfd in July. That compares to a monthly all-time high of 95 ,4 bcfd in November 2019.
With cooler weather on the horizon, Refinitiv forecasts average US gas demand, including exports, to fall from 94.3 bcfd last week to 92.2 bcfd this week, driven by generators Electricity uses less fuel.

Source: VITIC/Reuters

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