Commodity Market: US Crude Oil hits a one-week high as Hurricane Sally affects US output, API reports a drop in US crude stocks

Futures on US West Texas Intermediate Crude Oil extended gains from the prior trading day on Wednesday, as part of US offshore oil and gas production was shut down due to Hurricane Sally, while an industry report revealed an unexpected drop in US crude stockpiles.

Drillers and refiners shut at least 25% of US offshore oil and gas production on Tuesday, while export ports were closed due to incoming Hurricane Sally.

“Our current estimate for the total outage associated with the Sally weather system is between 3 million and 6 million barrels of oil over approximately 11 days,” Rystad Energy said in a note, cited by Reuters.

News of oil production being shut down usually supports oil prices.

Additional support for oil markets came on the heels of the latest weekly data by the American Petroleum Institute (API). It reported on Tuesday that US crude oil stocks had decreased by 9.5 million barrels during the week ended September 11th, surprising market players as analyst estimates had pointed to a 1.3 million barrel increase.

The latest data pointed to the sharpest slump in crude oil inventories since the week ended August 23rd 2019.

The official government report on crude oil inventories by the Energy Information Administration (EIA) is due out at 14:30 GMT today.

“If we see a number similar to the … drawdown the API reported overnight, it would likely provide some immediate support to the market,” ING Research wrote in a note.

As of 9:00 GMT on Wednesday WTI Crude Oil Futures were gaining 2.66% to trade at $39.30 per barrel, after earlier touching an intraday high at $39.42, or its strongest level since September 8th ($39.59). WTI Crude Futures have retreated 7.86% so far in September, following four straight months of gains.

Brent Oil Futures were gaining 1.80% on the day to trade at $41.38 per barrel, after earlier touching an intraday high at $41.60, or a price level not seen since September 8th ($42.20). Brent Oil Futures have dropped 9.09% so far in September, following five straight months of gains.

Daily Pivot Levels (traditional method of calculation) – WTI Crude Oil Futures

Central Pivot – $37.97
R1 – $38.88
R2 – $39.48
R3 – $40.39
R4 – $41.30

S1 – $37.37
S2 – $36.46
S3 – $35.86
S4 – $35.26

Daily Pivot Levels (traditional method of calculation) – Brent Oil Futures

Central Pivot – $40.28
R1 – $41.17
R2 – $41.68
R3 – $42.57
R4 – $43.45

S1 – $39.77
S2 – $38.88
S3 – $38.37
S4 – $37.85