Oil rallies, then fades as US crude stocks plunge into barrels of $ 11 million by Investing.com

Investing.com – Oil prices rose 1% on Wednesday after dropping 10.84 million barrels last week, nearly three times the expected level. But gains were wiped out in the afternoon session as several badysts said the downturn was distorted by Hurricane Barry's downtime.

Analysts had forecast a stock of about 4 million barrels for the week leading up to July 19, after dropping 3.1 million barrels the previous week.

The EIA report also showed a decrease of 226,000 barrels compared to the forecast of a draw of 730,000 barrels. increased by 613,000 barrels, compared to the forecast for a decline of 499,000 barrels.

Trade in New York was unchanged at $ 56.77 per barrel at 1:20 pm HE (18:15 GMT).

London traded stocks, the benchmark for oil outside the United States, climbed 26 cents, or 0.4%, to $ 64.09. It had traded up to $ 64.66.

Analysts attributed the larger-than-expected pullback to Hurricane Barry, which forced more than half of ordinary oil production to be shut down for at least two days before hitting the central coast of Louisiana on July 13.

"Hurricane Barry shook up the data for a second week, production was reduced, and frozen imports resulted in a draw of nearly 11 million barrels," said Matthew Smith, Clipperdata badyst, cargo tracker of crude oil in New York.

John Kilduff, founding partner of the New York Energy Hedge Fund, Again Capital, agreed.

"Clearly, the effects of Hurricane Barry led to the decline and collapse of US production during the week," Kilduff said.

However, Smith and Kilduff said that despite the exaggerated effects of the hurricane, the weekly dataset released by the EIA was rather optimistic for oil.

"Imports and exports of goods held at high levels," said Kilduff. "The demand for gasoline has also been strong this week."

Smith noted that "stocks are now down 40 million barrels from their peak of 2019 after six consecutive weekly declines".