US oil production recovers, inventories increase

The U.S.' crude oil production recovered, while its crude inventories increased, for the week ending Sept. 8, the country's Energy Information Administration (EIA) announced Wednesday.

In the aftermath of Hurricane Harvey, crude output in the U.S. fell by 749,000 barrels per day (bpd) to 8.78 million bpd, for the week ending Sept. 1.

Crude production recovered later and output increased by 572,000 barrels per day to 9.35 million bpd, for the week ending Sept. 8.

"As we expected crude oil production rebounded last week but many refineries remained shut, swelling crude stocks and pulling down gasoline inventories," Thomas Pugh, a commodities economist at London-based Capital Economics, said in a note.

Crude stocks increased for the second week in a row in the country by 5.9 million barrels, or 1.3 percent, to 468.2 million barrels.

Gasoline inventories, on the other hand, declined by 8.4 million barrels, or 3.7 percent, to 218.3 million barrels.

"The jump in crude stocks was driven by another drop in inputs to refineries as many remained closed because of the storm," Pugh said.

Oil imports decreased 603,000 bpd to 6.48 million barrels, for the week ending Sept. 8, while oil exports recovered and rose from 621,000 bpd to 774,000 bpd.

Shortly after the release of the EIA data, oil prices increased. WTI reached $48.95 a barrel, while Brent crude rose to $54.83 per barrel around 1500 GMT on Wednesday.

"… Demand from refineries should rebound strongly over the next few weeks. Oil production also has further room to recover," Pugh said.

"It will be difficult to get an idea of the underlying supply and demand trends until the impact of Hurricanes Harvey and Irma have worked their way through, which may take several more weeks," he added.

By Ovunc Kutlu in New York






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