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Crude Oil Price Rebounded as Production Halted by Hurricane while Inventory Fell

Crude oil price rebounded as hurricane Sally damaged production facilities while US inventory resumed decline last week. The front-month WTI crude oil contract extended gain for second day, rising to a 1.5- week high og US$40.34/bbl before settling at 40.16. The Brent contract also climbed higher. US Bureau of Safety and Environmental Enforcement suggested that the hurricane made landfall on Wednesday morning near Gulf Shores, Alabama, causing 119 production platforms in the Gulf of Mexico to evacuate personnel. This has halted production of over 500K barrels of oil production and 805 MMcfd of natural gas production.

The report from the US Energy Information Administration (EIA) shows that total crude oil and petroleum products (ex. SPR) stocks gained +4.3 mmb to 1429.16 mmb in the week ended September 11. Crude oil inventory declined -4.39 mmb (consensus: +1.27 mmb) to 496.05 mmb. Stockpile rose in 4 out of 5 PADDs. PADD  3 (Gulf Coast) inventory alone decreased -2.78 mmb during the week. Cushing stock dropped -0.074 mmb to 54.28 mmb. Utilization rate gained +4 percentage point to 75.8% while crude production added +0.9M bpd to 10.9M bpd for the week. Crude oil imports increased +0.42 bpd to 5.01M bpd in the week.

Concerning refined oil product inventories, gasoline inventory slid -0.38 mmb to 231.52 mmb as demand added +0.99% to 8.48M bpd. The market had anticipated a -0.16 mmb decrease in stockpile. Production gained +1.89% to 9.10M bpd while imports rose +4.53% to 0.6M bpd during the week. Distillate gained +3.46 mmb to 179.31 mmb. The market had anticipated a +0.6 mmb increase. Demand sank -24.35% to 2.81M bpd. Production added +0.11% to 4.4 mmb while imports plunged -30% to 0.11M bpd during the week.



A day earlier, the industry-sponsored API estimated that crude oil inventory fell -9.52 mmb during the week. For refined oil products, gasoline inventory added +3.76 mmb while that for distillate was down -1.12 mmb.


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