Oil prices rise on US production outages
Oil prices rose on Wednesday in US trading hours as production cuts caused by Hurricane Ian outweighed downward pressure from a strengthening dollar and expected US crude stockpile builds.
Brent crude futures were up 80 cents, or 0.9 per cent, at $87.07 per barrel by 1229 GMT, while US West Texas Intermediate (WTI) crude futures rose 97 cents, or 1.2 per cent, to 79.47 per barrel. Both contracts erased earlier falls after rising over 2 per cent in the previous session.
In the Gulf of Mexico, about 190,000 barrels per day of oil production, or 11 per cent of the Gulf's total, were shut-in due to Hurricane Ian, according to offshore regulator the Bureau of Safety and Environmental Enforcement (BSEE).
Global equities pulled off two-year lows on Wednesday, after the Bank of England said it would step into the bond market to stem a damaging rise in borrowing costs, thereby dampening investors' fears of contagion across the financial system.
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.
US crude oil stocks rose about 4.2 million barrels for the week ended September 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. The report comes ahead of official Energy Information Administration data due 1430 GMT.
Goldman Sachs cut its 2023 oil price forecast on Tuesday, due to expectations of weaker demand and a stronger US dollar, but said global supply disappointments only reinforced its long-term bullish outlook.
An upcoming price catalyst will be producer group Opec+'s October 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.