Early on Thursday, oil prices were stable after soaring on the previous day as the market is once again worried over weak fuel demand after Hurricane Sally passed by the US Gulf of Mexico.
At 01.18 GMT, Brent crude oil futures climbed by 0.1% or 5 cents to USD42.27/barrel after on Wednesday it rose by 4.2% while the US WTI crude futures did not budge at USD40.16/barrel following its 4.9% jump yesterday.
After Hurricane Sally blasted through the Gulf of Mexico into the southeastern US, concerns regarding the weak fuel demand resurfaced as energy firms were starting to return their personnel to offshore oil platforms in the region.
Due to the hurricane, almost 500,000 bpd of the Gulf’s offshore oil output was shut.
Currently, distillate demand is seen as a key point of concern, and the report of the bigger-than-expected jump in its stockpiles in the US last week further raised alarm about the country’s fuel demand.
In the week ended September 11, US distillate stocks surged by 3.5 million barrels, according to the Energy Information Administration (EIA). The reading was nearly six times more than analysts had expected.
On a side note, the Organization of the Petroleum Exporting Countries and its allies (OPEC+) has its Joint Ministerial Monitoring Committee (JMMC) meet today to review the market. However, according to sources, there is only a slim chance that the group would recommend further cuts to oil output despite the recent price drop.
