Weekly EIA petroleum supply data delayed to Thursday
Oil futures settle higher Tuesday, finding support from signs that Iran crude exports are falling ahead of reimposed sanctions.
Market participants also eyed any risks to energy infrastructure as Hurricane Michael headed for the Gulf of Mexico.
West Texas Intermediate crude for November delivery CLX8, -0.59% on the New York Mercantile Exchange rose 67 cents, or 0.9%, to settle at $74.96 a barrel. That was the highest finish since Wednesday. The global benchmark, Brent crude for December delivery LCOZ8, -0.61% gained $1.09, or 1.3%, to $85 a barrel on the ICE Europe exchange.
Iran exported only 1.1 million barrels a day of crude in the first week of October, Reuters reported, versus 1.6 million barrels a day in September and 2.5 million barrels a day in the spring.
Analysts at Commerzbank said signs of a perceptible decline in oil supply were allowing oil prices to overcome the weakness seen at the beginning of the week, which was prompted in part by indications the U.S. government might allow some crude importers waivers on Iranian crude.
The data indicate “U.S. sanctions are already having a visible impact even before officially coming into force in early November,” they said.
Meanwhile, Hurricane Michael was moving north-northwestward through the southern Gulf of Mexico. Concerns about the storm helped limit losses for crude on Monday, analysts said, though Michael is expected to miss the bulk of energy production in the region.
On Tuesday, the Bureau of Safety and Environmental Enforcement reported that 39.5% of oil production and 28.4% of natural-gas production in the Gulf of Mexico has been shut in as the hurricane heads into the region.
Weekly data on U.S. petroleum supplies will be released a day late this week because of Monday’s Columbus Day holiday. The American Petroleum Institute’s report is due out late Wednesday, while the Energy Information Administration’s data comes out Thursday at 11 a.m. Eastern time.
Analysts polled by S&P Global Platts expect the EIA report a climb of 1.61 million barrels in crude inventories for the week ended Oct. 5. Gasoline stocks were forecast to rise by 422,000 barrels, but a 1.71 million-barrel decline was expected for distillate supplies, the survey said.
On Nymex, November gasoline RBX8, -0.49% settled at $2.077 a gallon, down 0.8%, and November heating oil HOX8, -0.25% rose 1.2% to $2.424 a gallon.
November natural gas NGX18, +1.87% ended nearly flat at $3.266 per million British thermal units. It’s been fairly consistently marking its highest settlements since January.
Natural gas is up nearly 20% since mid-September, the Commerzbank analysts noted. They attributed the rally in part to a below-average increase in U.S. natural gas stocks in the last three months.
“Currently they are 17% below the five-year average and at their lowest level for this time of year in 15 years. Because lower-than-normal temperatures are forecast over the next few days in the U.S., increased heating demand and only a small inventory build are likely,” they said, in a note. “However, the record-high U.S. natural gas production should not allow any fears of a shortage to arise, even if stocks are at a comparatively low level at the start of the heating season. We therefore believe the further upside potential of the U.S. natural gas price to be limited.”
Weekly natural-gas storage figures from the Energy Information Administration were due on Thursday.