Crude Oil Prices Surge

U.S. Crude oil prices surged about 4 percent on Thursday after U.S. inventory data showed a surprisingly large drawdown in crude stocks as imports into the U.S. Gulf Coast slid last week due to Hurricane Hermine. Oil production in the Gulf of Mexico fell by as much as 22% at the end of last month due to a tropical depression, which later grew to become Hurricane Hermine. U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) decreased by 14.5 million barrels from the previous week to 511.4 million barrels, according to the U.S. Energy Information Administration.

Brent rose $2.01, or 4.2 per cent, to settle at $US49.99 a barrel, its highest close in almost three weeks. U.S. crude ended at $47.62 per barrel, up $2.12, or 4.7 per cent, the biggest daily percentage gain for U.S. futures since April. U.S. benchmark West Texas Intermediate for October delivery rose $2.12 to $47.62 a barrel. In London, Brent North Sea oil for November delivery gained $2.01 to $49.99 a barrel. The rally came after US Department of Energy data showed a 14.5 million barrel drop in US commercial inventories for the week ending September 2, the biggest weekly slump in US crude stockpiles for 17 years.

U.S. crude oil imports averaged about 7.1 million barrels per day last week, down by 1.8 million barrels per day from the previous week, as ships delayed offloading cargos in Texas and Louisiana due to Tropical Storm Hermine. Over the last four weeks, crude oil imports averaged 8.2 million barrels per day, 7.4% above the same four-week period last year. Total motor gasoline imports (including both nished gasoline and gasoline blending components) last week averaged 607,000 barrels per day. Distillate fuel imports averaged 108,000 barrels per day last week.

Meanwhile, oil prices also got a boost from Chinese government data that showed the country’s oil imports rose to their highest level of the year last month. According to the General Administration of Customs, China imported 32.85 million tons of crude oil in August, equivalent to 7.8 million barrels a day. The jump was partly driven by independent refiners as they rushed to cash in on low oil prices before their import quotas expire in December.