Oil prices remained largely unchanged on Wednesday as US production restrictions brought on by Hurricane Ian overcame pressure from a strengthening currency and increases in oil storage.
By 0937 GMT, US West Texas Intermediate (WTI) crude futures were down 9 cents, or 0.1%, at $78.41 per barrel, while Bent crude prices were up 5 cents, or 0.6%, at $86.32 per barrel. Both contracts reversed prior losses after increasing by more than 2% the previous session.
According to offshore regulator the Bureau of Safety and Environmental Enforcement, Hurricane Ian caused the shut-in of 11% of the Gulf of Mexico’s total oil production, or around 190,000 barrels per day (BSEE).
But on Wednesday, the dollar reached a new two-decade high versus a basket of currencies as rising global interest rates fueled worries of a recession. By making oil more expensive for customers using other currencies, a strong dollar lowers demand for it.
According to the sources, distillate stocks increased by roughly 438,000 barrels. The report is released before the official Energy Information Administration data release scheduled for 14:30 GMT.
Due to anticipated weaker demand and a higher US dollar, Goldman Sachs lowered its oil price projection for 2023 on Tuesday. However, it added that global supply shortfalls only strengthened its long-term bullish outlook.
The producer group OPEC+ meeting on October 5 will act as a price catalyst, at which Russia is likely to propose a production cut of about 1 million barrels per day, according to a person familiar with the Russian perspective on Tuesday.
An upcoming to market sources on Tuesday, who cited data from trade association the American Petroleum Institute, US crude oil stocks increased by roughly 4.2 million barrels for the week ending September 23, while gasoline inventories decreased by about 1 million barrels.
