Meanwhile, analysts anticipate another round of U.S. stock draws: File Image/Pixabay
Slow progress in restoring output following Hurricane Ida was cited as the reason for Wednesday's increase in oil prices of over 1 percent; and a related expectation that U.S. crude stocks have fallen supported a cautiously optimistic sentiment within analytical circles.
The disclosure that about 80 percent of U.S. Gulf production remained offline led to Brent rising $1.06, or 1.5 percent, at $72.75 per barrel at 1340 GMT; West Texas Intermediate rose $1.18, or 1.7 percent, to $69.53 per barrel.
As the scramble to bring production back on line intensifies, imports of Urals oil from Russia to the U.S. are set to increase in September and October; according to Bloomberg, Urals is trending at a 7-month high, with bids of $1.05 below Brent on Wednesday, compared with a discount of $1.95 per barrel prior to Ida.
Stephen Brennock, senior oil analyst, PVM
Iran is no longer the oil market’s wildcard
Prices were also said to be supported by protesters who blocked oil exports at the ports of Es Sider and Ras Lanuf in Libya, although production at fields that supply these terminals was unaffected; experts believe sustained protest could lead to an 800,000 barrel per day (bpd) loss of output in coming days.
However, Rob Haworth, senior investment strategist at U.S. Bank Wealth Management, pointed out that "There is a lot of spare capacity now around the world that can substitute for Libyan supply."
Meanwhile, Iran on Wednesday was accused by the United Nations of stonewalling an investigation into past nuclear activities, and this caused Stephen Brennock, senior oil analyst at PVM, to remark, "The Iran factor is therefore likely to be put on the back burner, at least for the time being.
"Iran is no longer the oil market's wildcard but expect it to make a comeback in the early part of 2022."
As for factors affecting upcoming trading behaviour, the American Petroleum Institute on Wednesday and the U.S. Energy Information Administration on Thursday are expected to disclose more crude stick draws: analysts polled by Reuters expect a fall of 3.8 million barrels in the week to September 3, as well as a gasoline stock draw of 3.6 million barrels and a 3 million barrel decline in distillates.