Oil prices rise on U.S. production outages

Oil prices stable as soaring dollar offset by U.S. output outages By Reuters

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Commodities 1 hour ago (Sep 28, 2022 06:11AM ET)

(C) Reuters. FILE PHOTO: An oil pump of IPC Petroleum France is seen at sunset outside Soudron, near Reims, France, August 24, 2022. REUTERS/Pascal Rossignol

By Shadia Nasralla

LONDON (Reuters) – Oil prices were broadly stable on Wednesday as pressure from a strengthening dollar and crude storage builds was offset by U.S. production cuts caused by Hurricane Ian.

Brent crude futures were up 5 cents, or 0.06%, at $86.32 per barrel by 0937 GMT, while U.S. West Texas Intermediate (WTI) crude futures were down 9 cents, or 0.1%, at $78.41 per barrel. Both contracts erased earlier falls after rising over 2% in the previous session.

In the Gulf of Mexico, about 190,000 barrels per day of oil production, or 11% of the Gulf’s total, were shut-in due to Hurricane Ian, according to offshore regulator the Bureau of Safety and Environmental Enforcement (BSEE).

But the dollar hit a fresh two-decade peak against a basket of currencies on Wednesday as rising global interest rates fed recession concerns. A strong dollar reduces demand for oil by making it more expensive for buyers using other currencies. [FRX/]

U.S. crude oil stocks rose about 4.2 million barrels for the week ended Sept. 23, while gasoline inventories fell about 1 million barrels, according to market sources on Tuesday, citing figures from industry group the American Petroleum Institute.

Distillate stocks rose by about 438,000 barrels, according to the sources. [API/S] The report comes ahead of official Energy Information Administration data due 1430 GMT.

Goldman Sachs (NYSE:GS) cut its 2023 oil price forecast on Tuesday, due to expectations of weaker demand and a stronger U.S. dollar, but said global supply disappointments only reinforced its long-term bullish outlook.

An upcoming price catalyst will be producer group OPEC+’s Oct. 5 meeting at which Russia is likely to propose an output cut of around 1 million barrels per day, a source familiar with the Russian viewpoint said on Tuesday.

Oil prices stable as soaring dollar offset by U.S. output outages

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