Aug 15 (Reuters) - Brent crude futures rose more than $2 per barrel on Wednesday, with U.S. crude extending gains to more than $1, as a drop in U.S. inventories and expectations that North Sea production will drop in September lifted oil prices.
The more research I do on the potental affects of the U.S. drought, the more I believe it will have an impact on crude oil prices. I believe it is already.
Oil Prices - August 15
Oil Prices - August 15
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: Oil Prices - August 15
The Energy Department said crude oil stockpiles fell 3.7 million barrels last week to 366.2 million barrels. Analysts had predicted a decline of 1.5 million barrels, according to Platts, the energy information arm of McGraw-Hill Cos.
It marked the third consecutive week with a big decrease. Yet, it’s not so much a sign of rising demand as of production and seasonal issues. Overall demand for oil and oil products in the U.S. remains week.
Oil production has been affected by a number of issues this month, including some refinery and pipeline problems. Tropical storms have moved through the Gulf of Mexico which closed some oil rigs and slowed oil tankers destined for U.S. ports.
In addition, refiners are selling off inventories to avoid a surplus when they switch to processing winter blends of fuel next month.
‘‘The bigger question is, are these numbers sustainable once these refiners start to come back on line?’’ Price Futures Group oil analyst Phil Flynn asked.
Although there have been signs of improvement in the U.S. economy, Europe continues to struggle and China still is working to reverse a slowdown in economic growth. Sluggish growth can reduce demand for energy products.
At the pump, the national average for gas rose less than a penny overnight to $3.709 per gallon, according to AAA, Wright Express and the Oil Price Information Service. That’s about 31 cents more than a month ago and nearly 12 cents more than a year ago.
It marked the third consecutive week with a big decrease. Yet, it’s not so much a sign of rising demand as of production and seasonal issues. Overall demand for oil and oil products in the U.S. remains week.
Oil production has been affected by a number of issues this month, including some refinery and pipeline problems. Tropical storms have moved through the Gulf of Mexico which closed some oil rigs and slowed oil tankers destined for U.S. ports.
In addition, refiners are selling off inventories to avoid a surplus when they switch to processing winter blends of fuel next month.
‘‘The bigger question is, are these numbers sustainable once these refiners start to come back on line?’’ Price Futures Group oil analyst Phil Flynn asked.
Although there have been signs of improvement in the U.S. economy, Europe continues to struggle and China still is working to reverse a slowdown in economic growth. Sluggish growth can reduce demand for energy products.
At the pump, the national average for gas rose less than a penny overnight to $3.709 per gallon, according to AAA, Wright Express and the Oil Price Information Service. That’s about 31 cents more than a month ago and nearly 12 cents more than a year ago.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group