Oil prices soared more than 4% on Wednesday after Hurricane Sally halted some of US offshore production and a general decline in crude oil and gas inventories in the country.
Sally, which swept the US Gulf Coast as a Category 2 hurricane, halted more than a quarter of offshore oil production, contributing to higher oil prices.
Around 500,000 barrels of offshore crude oil production per day in the Gulf of Mexico shut down; that’s roughly a third of the cuts caused by Hurricane Laura, which descended further west in August.
Brent crude LCOc1 settled at $42.22 a barrel, up $1.69, or 4.2%. West Texas Intermediate (WTI) crude CLc1 finished $1.88, or 4.9%.at $40.16 a barrel.
US crude inventories fell 4.4 million barrels last week to 496 million barrels, compared with analysts’ expectations of a 1.3 million barrel increase. Gasoline stocks are said to have dropped more than twice the estimates to 400,000 barrels, and refining utilization rates increased by 4 percentage points.
Sources say the OPEC + oil ministerial delegation meet on Thursday to review the supply pact, but is unlikely to propose further production restrictions despite the price drop.