Hurricanes Pound Oil Output, Crude Prices Climb

Petroleum prices rose for a second day on Wednesday, gaining more than 2%, as a hurricane closed U.S. offshore oil and gas production and an industry report showed U.S. crude inventories decreased.

Brent crude reportedly rose 90 cents in price, or 2.2%, to $41.43 U.S. a barrel, while U.S. crude rose 91 cents, or 2.39%, to $39.21. Both contracts rose by more than 2% on Tuesday.

More than 25% of U.S. offshore oil and gas output was shut and export ports were closed on Tuesday as Hurricane Sally sat just off the U.S. Gulf Coast.

Rystad Energy told the media its current estimate for the total outage associated with the Sally weather system is between three million and six million barrels of oil over the last 11 days.

That is likely to help reduce stockpiles although refineries were also shut down, cutting demand for oil.

Data Tuesday from the American Petroleum Insitute revealed U.S. crude oil inventories fell by 9.5 million barrels last week, although gasoline inventories increased.

Analysts had expected oil stocks to increase by 1.3 million barrels. Official data on U.S. stockpiles is due out later on Wednesday and often conflicts with the industry figures.

Moreover, the International Energy Agency also reduced its forecast for oil demand this year on Tuesday, because of a cautious outlook for the economic recovery from the pandemic.