U.S.: Inventory reduction makes oil close in high

Oil prices rose 1% on Wednesday after crude oil stocks decreased by 10,840,000 barrels last week, nearly three times the predicted level, a number that some analysts said had been distorted by the production charts Forced by Hurricane Barry.

Analysts predicted a smaller stock in about 4 million barrels for the week until July 19, after a fall of 3.1 million barrels in the previous week.

The report also showed that gasoline stocks decreased by 226,000 barrels, compared to the expectations of a fall of 730,000 barrels. The stocks of refined rose 613.00 barrels, compared to the forecasts for a fall of 499,000 barrels.

WTI crude oil futures contracts, traded in new York, would go up 41 cents, or 0.7%, to US $57.18 per barrel at 12h15.

Meanwhile, Brent Oil, negotiated in London, the benchmark for oil outside the U.S., would go up 42 cents, or 0.7%, to US $64.25.

Analysts attribute the fall greater than expected to Hurricane Barry, which forced the closing of more than half of the regular oil production in the Gulf of Mexico for at least two days before arriving in Louisiana on July 13.

"Hurricane Barry shook the dice for a second week with lower production and blocked imports leading to a consumption of nearly 11 million barrels," said Matthew Smith, an analyst at Clipperdata, a British raw cargo company based in New York.

John Kilduff, founding partner of the New York Energy hedge fund, Again Capital, agreed.

"Obviously, the effects of Hurricane Barry have led to the decline and drop in production in the U.S. this week," Kilduff said.

But both Smith and Kilduff said that despite the exaggerated effects of the hurricane, the weekly data set released by the EIA was quite optimistic for oil.

"Crude oil imports and exports have been kept at elevated levels," Kilduff said. "The demand for gasoline was quite strong in the week as well."

Smith noted that "stocks are below 40 million barrels in relation to the peak of 2019, after six consecutive weekly drops."

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