International crude oil prices slightly recovered from a 33-month low level and climbed three per cent or over $2 a barrel on Wednesday, September 11, driven by fears of lengthy production shutdowns in the offshore oil patch due to Hurricane Francine. The recovery in prices also came after an increase in US crude inventories reported earlier today, while US inflation eased in August.
Brent crude futures were last up $1.87, or 2.70 per cent, to $71.06 a barrel and the US West Texas Intermediate (WTI) crude futures last gained $2.05, or 3.12 per cent, to $67.80. Back home, crude oil futures last traded 2.91 per cent higher at ₹5,694 per barrel on the multi-commodity exchange (MCX).
What pushed crude oil prices from a three-year low?
-Crude oil prices shook off an increase in crude inventories reported by the US Energy Information Administration (EIA). The EIA said crude inventories rose by 833,000 barrels to 419.1 million barrels in the week ending September 6, lower than analysts’ expectations.
-Analysts said EIA data show Cushing inventories have drawn nine of the last ten weeks, down to the lowest level since early November last year. Concern about Hurricane Francine disrupting output in the US, the world’s biggest producer, also supported prices.
-Both oil benchmarks tanked on Tuesday, with Brent falling below $70 to its lowest price since December 2021 and US crude dropping to its lowest since May 2023 after OPEC revised its 2024 oil demand growth forecast for a second time.
-Analysts said the market rebounded autonomously, as Tuesday’s drop was substantial citing fears Hurricane Francine would disrupt supply. The US Bureau of Safety and Environmental Enforcement said on Tuesday that about 24 per cent of crude production and 26 per cent of natural gas output in the US Gulf of Mexico were offline due to the storm.
