Oil was steady on Thursday, holding gains from the previous session after another fall in US crude inventories indicated a tighter market, and as a tropical storm was heading for oil producing facilities in the Gulf of Mexico.
Brent crude futures, the international benchmark for oil prices, were at $52.58 per barrel at 0658 GMT, up 1 cent from their last close. US West Texas Intermediate (WTI) crude futures were at $48.36 a barrel, down 5 cents.
Both crude futures contracts rose more than 1 per cent on Wednesday, also buoyed by potential output disruptions from the Gulf of Mexico storm.
“For the next few days, the US market is going to be focused on Texas as the tropical depression Harvey is expected to strengthen into a Category I hurricane by Friday,” said Sukrit Vijayakar, director of energy consultancy Trifecta in a note.
“Operators in the area are already closing down platforms and evacuating workers as a precaution,” he added.
Harvey strengthened into a tropical storm late on Wednesday night with winds of about 40 miles per hour (65 km per hour) and was located about 440 miles (705 km) southeast of Port Mansfield, Texas, the U.S. National Hurricane Center reported.
Royal Dutch Shell, Anadarko Petroleum and Exxon Mobil have all taken steps to curb some oil and gas output at platforms in the Gulf, the companies had said on Wednesday.
Crude storage levels
Beyond the weather, traders said that ongoing declines in US commercial crude storage levels were a sign of a gradually tightening market, although another rise in output held the market back, they said.
“Another strong drawdown in US crude oil inventories should see oil prices well supported,” ANZ bank said, although it added that “there was a hint of cautiousness, with US oil output continuing to push higher.”
US oil production
US oil production hit 9.53 million barrels per day (bpd) last week, the highest level since July 2015 and up over 13 per cent from their most recent low in mid-2016.
Despite this, US crude stocks fell last week and gasoline stocks were down as well, the Energy Information Administration had said on Wednesday.
Crude inventories fell 3.3 million barrels in the week ending August 18, to 463.17 million barrels, down 13.5 per cent from their record levels last March.