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Crude Oil Prices higher with Inventory Draw

Crude Oil futures were up in mid-morning Asian trade on Sept. 22 as fundamentals firmed and US crude stocks fell. The ICE November Brent futures contract was 50 cents/b (0.67 percent) higher at $74.86/b at 10:30 a.m. Singapore time (0230 GMT), while the NYMEX November light sweet crude contract was 59 cents/b (0.84 percent) higher at $71.08/b. US oil companies were still struggling to restart output that had been halted by Hurricane Ida three weeks ago, highlighting limited supply as demand improves.

ANZ research analysts said, “Crude Oil prices pared losses as the risk-off tone of the market subsided and the focus shifted back to strong fundamentals.” The US removing a ban on international passengers boosted sentiment even more, perhaps adding more than 190,000 b/d of jet fuel demand in November. According to the US Bureau of Safety and Environmental Enforcement, around 320,909 b/d of oil production, or 16.64 percent, is still offline in the Gulf, while gas production is down to 566.67 MMcf/d, or 25.42 percent.

IG Market Strategist Yeap Jun Rong said, “After hitting a resistance level at 93.45 this week, the US dollar index continues to consolidate as traders are largely on hold for the Fed meeting today.” Despite the reduction in the share of offline production, supply is projected to remain tight after Shell announced that a full recovery in the Gulf is unlikely in the short term due to damage to its facilities, pushing the region’s resumption of full capacity until the first quarter of 2022. For more pricing clues, the market will now wait for the US Energy Information Administration’s stocks report, which is set to be released on September 22.

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