Bulletin
Investor Alert

Futures Movers Archives | Email alerts

Sept. 21, 2021, 3:06 p.m. EDT

Oil ends higher, supported by bets for a weekly drop in U.S. crude supplies, a day after Evergrande-inspired selloff

new
Watchlist Relevance
LEARN MORE

Want to see how this story relates to your watchlist?

Just add items to create a watchlist now:

  • X
    Crude Oil Continuous Contract (CL00)

or Cancel Already have a watchlist? Log In

By Myra P. Saefong and William Watts

Oil futures ended higher on Tuesday, supported by expectations for a weekly drop in U.S. crude inventories, a day after a broad selloff attributed to jitters about the impact of a default by Chinese property giant Evergrande.

“It’s one of those rollercoaster days as the market…seemed confused over how to interpret two opposing forces: the concern over the effect of China’s Evergrande possible default and the tight U.S. supply signs,” Nishant Bhushan, oil markets analyst at Rystad Energy, wrote in daily commentary.

West Texas Intermediate crude for October delivery tacked on 27 cents, or 0.4%, to finish at $70.56 a barrel on the New York Mercantile Exchange on the contract’s expiration day. It had traded as low as $69.67. November WTI crude /zigman2/quotes/209723049/delayed CL00 +0.26% , which is now the front month contract, rose 35 cents, or 0.5%, to settle at $70.49 a barrel.

November Brent crude , the global benchmark, climbed 44 cents, or 0.6%, to settle at $74.36 a barrel on ICE Futures Europe.

“Bringing a bullish tailwind” are expectations for a drawdown of U.S. crude inventories and reports that OPEC+ — the Organization of the Petroleum Exporting Countries and their allies — is 116% compliant in August with their oil production curbs, analysts at Blue Line Futures wrote in their latest note.

“We expect bullish tailwinds to show up from the risk-landscape in the near term,” analysts at Blue Line Futures said. “From there, we do believe a subsiding delta narrative can bring a strong year-end rally,” as the U.S. has begun “laying a plan to lift travel bans for international travelers and we expect this to be an ongoing narrative in Q4.”

Oil, along with a range of other commodities, equities and other assets perceived as risky, sold off Monday, a move tied in large part to worries surrounding a potential default by Evergrande /zigman2/quotes/208605330/delayed HK:3333 +4.26% .

Read: Commodities, including iron ore and copper, take a hit on potential collapse of China’s Evergrande

Meanwhile, data shows U.S. oil output in the Gulf of Mexico continues to recover slowly from Hurricane Ida, which hit the Louisiana coast on Aug. 29. The Bureau of Safety and Environmental Enforcement late Tuesday said 16.6% of oil production in the Gulf remained shut in, equal to 320,909 barrels a day of output.

“More than 80% of offshore platforms have returned to operation as output continues its slow return from the damage dealt by Hurricane Ida,” said Christin Redmond, global commodity analyst at Schneider Electric, in a Tuesday note. 

“The remaining outages could be offline for an extended stretch though, headlined by Shell’s recent announcement that significant damage to infrastructure,” she said.

Royal Dutch Shell /zigman2/quotes/205095589/composite RDS.A -0.33% /zigman2/quotes/207682964/composite RDS.B -0.51% , the Gulf’s largest producer, on Monday said damage to its WD-143 transfer facility won’t be fully repaired until the first quarter of next year.

The Energy Information Administration will release its weekly data on U.S. petroleum supplies Wednesday. Data from the American Petroleum Institute will be issued ahead of that, on Tuesday afternoon.

Forecasts for the EIA data vary following Hurricane Ida’s disruptions to Gulf of Mexico production. On average, analysts expect the EIA to report a fall of 3.8 million barrels in domestic crude supplies for the week ended Sept. 17, according to a survey conducted by S&P Global Platts. They also forecast inventory declines of about 900,000 barrels for gasoline and 1.4 million barrels for distillates.

On Nymex Tuesday, October gasoline shed 0.5% to $2.105 a gallon, while October heating oil added 0.7% to $2.174 a gallon.

October natural gas settled at $4.805 per million British thermal units, down 3.6%.

/zigman2/quotes/209723049/delayed
US : U.S.: Nymex
$ 83.98
+0.22 +0.26%
Volume: 449,253
Oct. 22, 2021 4:59p
loading...
/zigman2/quotes/208605330/delayed
HK : Hong Kong
$ 2.69
+0.11 +4.26%
Volume: 172.66M
Oct. 22, 2021 4:08p
P/E Ratio
1.88
Dividend Yield
6.77%
Market Cap
$35.64 billion
Rev. per Employee
$4.66M
loading...
/zigman2/quotes/205095589/composite
US : U.S.: NYSE
$ 48.69
-0.16 -0.33%
Volume: 4.39M
Oct. 22, 2021 4:00p
P/E Ratio
34.44
Dividend Yield
2.61%
Market Cap
$186.88 billion
Rev. per Employee
$1.95M
loading...
/zigman2/quotes/207682964/composite
US : U.S.: NYSE
$ 48.89
-0.25 -0.51%
Volume: 2.30M
Oct. 22, 2021 4:00p
P/E Ratio
34.58
Dividend Yield
3.05%
Market Cap
$186.88 billion
Rev. per Employee
$1.95M
loading...

This Story has 0 Comments
Be the first to comment
More News In
Markets

Story Conversation

Commenting FAQs »

Partner Center

Link to MarketWatch's Slice.