© Reuters. FILE PHOTO: An oil pump of IPC Petroleum France is seen at sunset outside Soudron, near Reims, France, August 24, 2022. REUTERS/Pascal Rossignol
By Shadia Nasralla
LONDON (Reuters) -Oil prices rose on Wednesday in U.S. trading hours as production cuts caused by Hurricane Ian outweighed downward pressure from a strengthening dollar and expected stockpile builds.
futures were up 55 cents, or 0.6%, at $86.82 per barrel by 1351 GMT, while U.S. West Texas Intermediate (WTI) crude futures rose 94 cents, or 1.2%, to $79.44 per barrel. Both contracts erased earlier falls after rising over 2% in the previous session.
In the Gulf of Mexico, about 190,000 barrels per day of oil production, or 11% of the Gulf’s total, were shut-in due to Hurricane Ian, according to offshore regulator the Bureau of Safety and Environmental Enforcement (BSEE).
Global equities pulled off two-year lows on Wednesday, after the Bank of England said it would step into the bond market to stem a damaging rise in borrowing costs, thereby dampening investors fears of contagion across the financial system. [MKTS/GLOB]
The dollar hit a fresh two-decade peak against a basket of currencies on Wednesday as rising global interest rates fed recession concerns. A strong dollar reduces demand for oil by making it more expensive for buyers using other currencies. [FRX/]
U.S. crude oil stocks rose about 4.2 million barrels for the week ended Sept. 23, while gasoline inventories fell about 1 million barrels, according to market sources on Tuesday, citing figures from industry group the American Petroleum Institute.
Distillate stocks rose by about 438,000 barrels, according to the sources. [API/S] The report comes ahead of official Energy Information Administration data due 1430 GMT.
Goldman Sachs (NYSE:) cut its 2023 oil price forecast on Tuesday, due to expectations of weaker demand and a stronger U.S. dollar, but said global supply disappointments only reinforced its long-term bullish outlook.
An upcoming price catalyst will be producer group OPEC+’s Oct. 5 meeting at which Russia is likely to propose an output cut of around 1 million barrels per day, a source familiar with the Russian viewpoint said on Tuesday.