Oil prices surged on Wednesday, with Brent up over 3% and WTI up nearly 4% shortly after the Energy Information Administration (EIA) reported surprise draws in US crude oil inventory and natural gas stocks.
Also contributing to the surge in oil prices was a US dollar giving up some of its recent gains and some 11% of output shuttered in the Gulf of Mexico as Hurricane Ian made its way toward the Florida coast.
At 1:45 p.m. EST Wednesday, Brent crude was trading at $88.92 per barrel, up $2.65 (+3.07%) on the day, while WTI was trading at $81.57, up $3.07 (+3.91%) on the day.
Oil’s Wednesday gains pare significant losses last week, when prices fell to their lowest levels since January in the aftermath of a global central bank interest rate hikes and fears of recession.
Earlier on Wednesday, the EIA reported a crude oil inventory draw of 200,000 barrels for the week to September 23. The previous week has seen a 1.1-million-barrel build on inventories. The surprise draw Wednesday came after the American Petroleum Institute (API) had estimated a 4.15-million-barrel build for the week to September 23, catching the market off guard.
In a Dallas Fed poll released on Wednesday, oil and gas executives tempered their year-end oil prices expectations, dropping them from an average of $107.93 last quarter to $88.74 per barrel in the latest survey.
The most pessimistic executives estimate $65 per barrel, as they did last quarterwhile the bulls have reduced their high-end price from $160 per barrel to $120 per barrel.
By Charles Kennedy for Oilprice.com
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