(New York) Oil prices edged higher on Wednesday after Hurricane Idalia hit Florida, the military coup in Gabon and a sharp drawdown in U.S. inventories.
A barrel of Brent North Sea, for October delivery, rose 0.43% to $85.86.
Its American equivalent, a barrel of West Texas Intermediate (WTI), for delivery the same month, gained 0.57% to 81.63 dollars.
Oil was pushed higher by “a massive drop in US oil statistics and a military coup at OPEC (Organization of Petroleum Exporting Countries) producer Gabon,” analysts said. from DNB.
Soldiers announced Wednesday to “end the regime in place” in Gabon, a coup against outgoing President Ali Bongo, in power for 14 years and whose re-election had just been announced overnight.
While Gabon is “a minor OPEC producer” with production of around 200,000 barrels per day, “this is a reminder (that) geopolitical risk in the oil market” still exists, DNB analysts continue.
As for US stocks, the drain on these reserves was much stronger than expected, according to figures from the US Energy Information Agency (EIA). Reserves fell by 10.6 million barrels while analysts expected a reduction of 2.2 million.
This large drain on crude inventories “is a continuation of a month-long trend, when a total of some 20 million barrels of crude are directed to refineries to be transformed into gasoline and diesel for consumers”, reacted Andy Lipow of Lipow Oil Associates.
“But it can’t last forever. This is in any case supporting crude prices,” he added.
For John Kilduff of Again Capital, the price action shows “an anxious market”.
But according to him, the increase was moderate, because Hurricane Idalia “did not hit the heart of the production tool” oil.
“It’s actually going to destroy a bit of demand at some point” as traffic and gas supplies in the area will slowly resume, he explained.
For the analyst, the coup in Gabon should not represent “a material reduction in supply”. “However, it reminds us of the geopolitical risks that we run in Africa from coast to coast,” he said.
