Oil prices rise on Wednesday as European, Chinese demand drive West Africa crude grades while supplies in the US Gulf of Mexico are yet to recover in the aftermath of Hurricane Ida.
Offer prices for a range of West African crude grades continued to receive support from a pick-up in sales to Europe and China for October-loading exports. Recent loading issues on Nigerian oil streams including Qua Iboe, Forcados and Bonga coupled with renewed buying interest from Europe pushed up offer levels.
In addition, offers for light sweet Qua Iboe and Bonny Light were as high as dated Brent plus $1 in the last week. October-loading Escravos crude was offered for around $1.20 above dated Brent.
Today, international benchmark Brent crude was trading at $72.13 per barrel, gained 0.61% after closing Tuesday at $71.69 a barrel.
American benchmark West Texas Intermediate (WTI) traded at $68.86 a barrel at the same time with a 0.74% decrease after ending the previous session at $68.35 per barrel.
Oil prices started the week on a bearish sentiment after Saudi Arabia’s decision to trim the prices of Arab Light crude for its Asian customers by $1.30.
However, oil platform operations in the Gulf of Mexico have not been fully restored after Hurricane Ida, considered the worst storm in the last 16 years, hit the region.
According to the US Bureau of Safety and Environmental Enforcement, 79.3% of the current oil production and 77.9% of the natural gas production in the Gulf of Mexico have been shut in.
Experts also concur that gas consumption will slow down when the US driving season ends to weigh on prices amid virus-induced demand worries.
Investors are now keeping tabs on the inventory data forecast of the American Petroleum Institute (API) later on Wednesday and data of the US Energy Information Administration (EIA) on Thursday.