Oil prices steadied on Thursday after a decline earlier in the day as production started in the Gulf of Mexico after Hurricane Sally while a drawdown in U.S. crude and gasoline inventories supported the market.
Both contracts rose more than 4% on Wednesday.
U.S. energy companies were starting to return crews to offshore oil platforms in the Gulf of Mexico after Hurricane Sally halted operations for five days, shutting down output of nearly 500,000 barrels per day (bpd).
“As producers prepare to resume production, oil prices are retreating from yesterday’s price spike,” said oil broker PVM’s Tamas Varga.
Prices found some support as U.S. crude stocks fell 4.4 million barrels last week, their lowest since April, the U.S. Energy Information Administration said on Wednesday, compared with analysts’ expectations in a Reuters poll for a 1.3 million-barrel rise.
Meanwhile, an OPEC+ technical panel warned that a rise in coronavirus cases in some countries may curb oil demand despite signs of economic recovery and initial indications of a decline in oil stocks, according to an internal document seen by Reuters.
Global coronavirus cases are expected to pass 30 million on Thursday, according to a Reuters tally.
Later on Thursday, OPEC and its allies led by Russia, are scheduled to hold an online meeting to discuss compliance with their agreed output cuts and demand trends amid falling oil prices and a faltering economic recovery outlook.
“Mission is far from accomplished by OPEC+ and the need for deeper cuts or reining in sub-compliers to avoid global stock builds returning is overarching,” said Rystad Energy’s head of oil markets Bjornar Tonhaugen.