CommoditiesOil Dips 0.2%, Retains Most of Previous Gains After Draw in U.S. stocks

An Oil Rig off the coast of the Pacific ocean. [Image/Getty]

Oil prices slipped on Thursday, paring back only some of the large gains made the previous day on the back of a larger-than-expected drawdown in crude oil stocks in the United States.

Brent crude oil fell 12 cents, or 0.2%, to $75.34 a barrel by 0649 GMT, after rallying 2.5% the previous day.

U.S. West Texas Intermediate (WTI) crude was down 14 cents, or 0.2%, at $72.47 after surging 3.1% on Wednesday.

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U.S. crude oil and fuel stockpiles dropped sharply last week, as refiners in the U.S. Gulf region and oil facilities offshore were still recovering from Hurricane Ida, the Energy Information Administration (EIA) said on Wednesday. The United States is the world’s largest oil consumer.

Crude inventories fell by 6.4 million barrels in the week to Sept. 10 to 417.4 million barrels, the EIA said, compared with expectations in a Reuters poll for a 3.5 million-barrel drop.

“The data follow warnings from the International Energy Agency that supply lost from storms in the Gulf of Mexico would offset gains from OPEC,” analysts from ANZ Research in a note on Thursday.

The storm caused a global decline in supply for the first time in five months but the market is set to begin approaching balance in October as the Organization of the Petroleum Exporting Countries (OPEC) and allies such as Russia, a grouping called OPEC+, carry out plans to increase supply.

U.S. Gulf energy companies have also been able to quickly restore pipeline service and electricity after Hurricane Nicholas passed through Texas, allowing them to double down on efforts to repair more significant damage from Ida.

Nicholas caused minor flooding and power outages in Texas and Louisiana, where some refineries remained offline in the wake of Category-4 Hurricane Ida.

Ida shut a large portion of the U.S. Gulf offshore oil and gas output. About 30% of U.S. Gulf production remained shut as of Wednesday, according to the Bureau of Safety and Environmental Enforcement.

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