Oil prices become steady as storm threat wanes
US Gulf Coast energy companies continue to rally as Nicholas receded. Oil prices calmed on Thursday after hitting several-week highs the day before as the hurricane's threat to US Gulf crude oil production waned.
Brent oil closed the session at $75.67 a barrel, up 21 cents, or 0.3%. On Wednesday, Brent had touched $76.13, its highest level since July 30.
West Texas Intermediate (WTI) closed the session unchanged at $72.61 a barrel after climbing to its highest level since August 2 on Wednesday.
While the prices are at the highest levels of the summer, some profits are seen supporting the rally.
US Gulf energy companies were able to quickly restore pipeline and electricity services after Hurricane Nicholas crossed Texas earlier this week, helping them focus their efforts to repair the heavy damage caused by Hurricane Ida weeks ago.
It's hard to see oil prices rising any further in the near term, as tropical storm Nicholas didn't cut much heavy into US production. The main thing is that the oil production capacity affected by Ida has not been subjected to a heavier storm and destruction.
Oil was bolstered on Wednesday by figures showing US crude inventories fell 6.4 million barrels last week, larger than expected, due to the impact of Ida.
Brent is up nearly 45% this year, supported by supply cuts from the Organization of the Petroleum Exporting Countries (OPEC) and its allies, and some recovery from last year's pandemic-induced demand collapse.
The increase in European gas prices supports oil prices. Oil is also being supported by rising European electricity prices, which are driven by factors such as low gas inventories and lower-than-normal gas supplies from Russia.
Benchmark European gas prices at the Dutch TTF hub have risen by more than 250% since January.
The IEA and OPEC predict oil demand will rise above 100 million barrels per day within months. In addition to signs of recovery in oil demand, closely watched OPEC and International Energy Agency reports this week forecast that by the second quarter of next year, global oil use will rise above 100 million barrels per day, the level last reached in 2019.
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