NEW YORK, Sept. 15 (UPI) — Crude oil prices staged a recovery in early Thursday trading on a smaller-than-expected build in U.S. inventories, though the rebound may be short-lived.
The U.S. Energy Information Administration reported Wednesday that crude oil stocks in the country declined by around 500 million barrels. While relatively small, the draw was not what market players expected after U.S. Gulf of Mexico operations returned to normal in the wake of Tropical Storm Hermine.
Oil prices started trading Thursday in positive territory on the build, however. The price for Brent crude oil was up nearly 0.8 percent to start the trading day at $46.23 per barrel. West Texas Intermediate, the U.S. benchmark price for oil, was up 0.7 percent to open in New York at $43.87 per barrel.
Demand for fuel products in the United States is on pace for a seasonal decline as summer vacation season ends. Drillers, meanwhile, are returning to work as efficiency improves and resilience to crude oil prices in the upper $40 range takes hold.
“All told, the market remains in a position of struggling to find a catalyst to move materially higher,” Anthony Starkey, a manager for energy analysis at S&P Global Platts, said in an emailed statement.
Elsewhere on the demand side, the U.S. Labor Department reported first-time claimsfor unemployment increased 1,000 last week, while the less volatile four-week average declined by 500. After a 0.6 percent increase in July, U.S. industrial production dropped 0.4 percent in August, a trend mirrored by manufacturing output.
On the supply side, the U.S. Federal Reserve reported declines in coal-mining activity were offset by gains in oil and gas extraction. Elsewhere, the market could be pressured further on the supply side now that Libya is once again suggesting a recovery for exports, while Nigeria may be on the verge of a comeback.
“Any easing of the export disruptions in Nigeria and Libya will therefore translate into a picture of increased stock-builds for 2017,” Olivier Jakob, the managing director at Swiss oil-market research group Petromatrix, said in an emailed statement.
In the coming weeks, Kashagan, a giant oil field in the Kazakh waters of the Caspian Sea, is expected to start production.
