Fears around lack of supply are now overcoming fears about lack of demand, as the industry seeks a delicate balance between the two.
The sentiment of the oil market has changed. The fears surrounding the lack of supply are now overcoming the fears surrounding the lack of demand, as the industry seeks a delicate balance between the two.
Crude oil prices, as well as natural gas, rose on Wednesday, as the API reported that inventories of crude oil and petroleum products fell a day earlier.
Oil prices are now at a six-week high.
The price of WTI rose 3.16% on Wednesday to $ 72.69 at 10:00 a.m., up $ 2.23 a barrel a day. Brent crude was up 2.89%, up $ 2.13 a barrel to $ 75.73.
Natural gas was trading at 6.69% a day, at $ 5.612 per MbTU, more than it had been in more than seven years, and more than four times as much as a year ago.
Crude oil stocks fell 5.4 million barrels during the week ending Sept. 10, the API reported Tuesday, compared to a projected fall of 3.5 million barrels. Part of the decline in inventory was due to Hurricane Ida, which at one time shut down almost all crude oil production in the Gulf of Mexico.
2021 has been a particularly brutal year of hurricanes for the oil industry and inventories of petroleum products have fallen as refineries sink due to storms.
The sentiment that presides over the oil industry today seems to be that a wider deployment of vaccines will further increase oil demand.
However, the limitation of gains in the price of crude oil is the operating rate of the Chinese refinery, which fell to May 2020 levels, which reduced the need for crude oil. China has also released part of its own crude oil from its strategic oil reserves to avoid paying the current highest price of crude oil.
By Julianne Geiger for Oilprice.com
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