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Business News/ Markets / Commodities/  Oil prices extend gains on tighter US crude, hurricane Idalia concerns; Brent over $85/bbl
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Oil prices extend gains on tighter US crude, hurricane Idalia concerns; Brent over $85/bbl

US crude inventories dropped by 10.6 million barrels in the last week to 422.9 million barrels, Energy Information Administration data showed on Wednesday.

Cheap crude oil imports from Russia aided the rise in margins Premium
Cheap crude oil imports from Russia aided the rise in margins

Oil prices extended gains on Wednesday, August 30, after US government data showed tighter-than-expected crude supplies in US, while hurricane Idalia kept investors on edge. US crude inventories dropped by 10.6 million barrels in the last week to 422.9 million barrels, Energy Information Administration data showed on Wednesday. Product supplied of finished motor gasoline - a proxy for demand - was at about 9.1 million barrels per day, according to news agency Reuters.

Brent crude futures for October rose 21 cents to $85.70 a barrel  EDT.. The October contract expires on Thursday and the more active November contract was at $85.13, up 22 cents. U.S. West Texas Intermediate crude futures rose 30 cents to $81.46. Both benchmarks rallied by more than a dollar on Tuesday as the US currency weakened after soft US jobs data reduced the likelihood of further increases to interest rates.

Back home, on the Multi Commodity Exchange (MCX), crude oil futures due for a September 19 expiry, were last trading higher by 0.39 per cent at 6,730 per bbl, having swung between 6,689 and 6,775 per bbl during the session so far, against a previous close of 6,704 per barrel.

What's driving crude oil prices?

-The US economy expanded at a 2.1 per cent annual pace in the April-June quarter, compared to the initial estimate of 2.4 per cent, according to official revised estimates released on Wednesday. The US government had previously estimated that the economy expanded at a 2.4 per cent annual rate last quarter.

-Investors kept an eye on Hurricane Idalia, which came ashore as a Category 3 storm on Wednesday morning in a Florida region where the northern panhandle curves into the peninsula. By midday, the hurricane approached southeastern Georgia as a Category 1 storm.

-Analysts expect Saudi Arabia, the world's biggest oil exporter, to extend its voluntary output cut into October, keeping oil supply tight. Saudi Arabia's official selling prices for all crude grades sold to Asia in October will be raised to their highest this year, according to Reuters.

-Oil's gains were capped, however, by concern over the mixed economic situation in China, the world's biggest oil importer. Chinese refiners are poised to boost diesel exports in September to more than 1 million metric tons, drawn by lucrative margins from selling overseas, as per the news agency.

 

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Published: 30 Aug 2023, 09:15 PM IST
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