Oil prices extend recovery as US output slows down

Oil prices rose in European trade for the second day off eight-month lows amid concerns about global supplies as US output slows down following heavy storms in the Mexican Gulf. 

Prices were also buoyed by expectations OPEC Plus might cut output to support prices, which overcame the impact of higher US crude inventories. 

Global Prices

US crude rose 2.3% to $79.73 a barrel, while Brent added 1.4% to $87.25, with a session-low at $84.31. 

US crude rose 2.2% on Tuesday, while Brent rose 2.1%, the first profit in three days off eight-month lows. 

US Output

The US shutdown maritime oil rigs that pump 190 thousand bpd, or 11% of the region's output, due to current storms. 

Major oil companies BP and Chevron were forced to close production in maritime rigs in the Mexican Gulf amid approaching storms.

The Mexican Gulf represents 17% of total US crude output, which topped at 12.1 million bpd recently, a two-year high.

OPEC Plus

Iraq's oil minister said today that OPEC Plus is monitoring prices closely and is seeking to rebalance them.

Such statements paved way for forecasts the oil cartel might cut output this year to maintain balance.

US Inventories

Initial US data showed commercial crude stocks rose 4.2 million barrels in the week ending September 23, the fifth increase in a row, blowing past estimates of a 0.5 million barrels increase. 

Total stocks now are up to 443 million barrels according to the initial data, the highest since the week ending July 16, 2021, in a sign for weak demand in the US.