US oil output returns to pre-Ida levels
EIA: US crude inventories rise by 4.6 million barrels to 418.5 million barrels
Oil prices traded down for much of Wednesday before paring losses after the latest data from the US.
Brent crude futures had surpassed $80 per barrel at the start of the week as China stared down the barrel of a power-generation crisis, European markets looked for alternatives to natural gas after record price rises and the US continued to contend with the disruption wrought by Hurricane Ida.
API’s surprise report
The latter concern was allayed on Tuesday, however, when the American Petroleum Institute (API) reported a surprise build in US crude oil inventories for the week ended 24 September.
Having last week reported a draw of 4.3 million barrels larger than analysts had expected, markets anticipated a 2.3-million-barrel loss. The shock of the 4.1-million-barrel build thus caught investors and traders off guard, and sent West Texas Intermediate crude futures tumbling.
The impact of Hurricane Ida, which made landfall at the start of the month, has also faded significantly. According to the latest data, more than 84% of oil producers in the Gulf of Mexico have resumed normal activity, with 10.6 million barrels per day (bpd) produced in the week ending 17 September.
Wednesday saw the publication of the official data from the US Energy Information Administration (EIA) for the week ended 24 September, as relayed by Reuters.
It found that crude inventories rose by 4.6 million bpd to 418.5 million bpd. US crude production rose by 500,000 bpd to 11.1 million bpd, which was back to pre-Ida levels.
While oil futures traded flat at 17:00 (BST), spot Brent and WTI crude both traded 1.1% higher at $78.31 and $75.25 per barrel, respectively.
Further reading: European stocks recover after worst sell-off in nine months