Oil jumps by over $2 a barrel after US inventory drawdown

NEW YORK — Oil prices rose over $2 a barrel on Wednesday after government data showed a larger-than-expected drawdown in US crude inventories, and on expectations demand will rise as vaccination rollouts widen.

US crude oil stockpiles fell last week to the lowest since Sept. 2019, the US Energy Information Administration said, extending their drawdown after Hurricane Ida late August shut numerous refineries and offshore drilling production.

Brent crude rose $1.86 or 2.5% to settle at $75.46 a barrel. US West Texas Intermediate (WTI) crude climbed $2.15 or 3.1% to $72.61 a barrel.

Earlier in the session, Brent touched $76.13 a barrel, a contract high, and the highest outright price since late July.

US crude and distillate inventories last week fell more than analysts expected, while gasoline stocks also declined, but fell slightly short of analysts’ expectations.

US crude inventories declined by 6.4 million barrels in the week to Sept. 10 to 417.4 million barrels, compared with analysts’ expectations in a Reuters poll for a 3.5-million-barrel drop. Tropical Storm Nicholas moved slowly through the Gulf Coast on Tuesday, leaving hundreds of thousands of homes and businesses without power, although Texas refineries ran normally.

Damage from the storm comes two weeks after Ida knocked a significant amount of Gulf Coast refining capacity offline.

Oil prices also found support from the International Energy Agency (IEA), which said on Tuesday vaccine rollouts would power a rebound, after a threemonth slide in global oil demand due to the spread of the Delta coronavirus variant and renewed pandemic restrictions.

But oil price gains were capped by a fall in China’s crude throughput in August, with daily refinery runs hitting the lowest since May 2020 and overall factory output faltering.