Oil Price Fundamental Daily Forecast – EIA Report Expected to Show 4.1M Build

U.S. West Texas Intermediate crude oil and international-benchmark Brent crude oil continued to attract buyers on Wednesday, supported by rising demand from the United States where Texas Gulf Coast refineries are restarting in the wake of Hurricane Harvey.

October WTI crude oil settled at $49.16, up +0.50 or +1.03% and December Brent crude oil closed at $54.07, up $0.71 or +1.33%.

U.S. Gulf Coast facilities were slowly recovering from the impact of Hurricane Harvey on key infrastructure in the heart of the U.S. oil and natural gas industry. As of Wednesday, about 3.8 million barrels of daily refining capacity, or about 20 percent, was shut in. U.S. crude prices could continue to be supported as U.S. refineries increase their oil demand as they recover from recent flooding.

Gains could be limited by increased output from OPEC. Its crude exports in August were 25.19 million barrels per day, their lowest since April, according to Thomson Reuters Oil Research. However, average levels for January-August of 25.05 million bpd were above the average 24.85 million bpd in 2016, despite OPEC’s pledge to hold back supplies between January this year and March 2018.

Overall, global oil supplies remain plentiful despite a dip in OPEC’s August exports.

Forecast

Crude oil prices are trading steady to lower early Thursday as investors digest the latest data from the American Petroleum Institute (API). Traders are also monitoring Hurricane Irma as it heads towards Florida. It is likely to have an impact on gasoline demand. Later today, investors will get the opportunity to react to the latest weekly inventories data from the U.S. Energy Information Administration (EIA).

The API reported a build of 2.791 million barrels in U.S. crude inventories. Analysts were looking for a build of 4.022 million barrels for the week-ending September 1.

Gasoline inventories fell by 2.544 million barrels for the week-ending September 1, against a larger expected draw of 5.0 million barrels.

Traders are saying that in the wake of Hurricane Harvey, the U.S. could see as much as 40-60 million barrels added to inventory while shuttered refineries struggle to come back online.

Later today at 1430 GMT, the EIA report is expected to show a 4.1 million barrel build.