Picture used for illustrative purpose. File
Oil prices rose for a second day on Wednesday, gaining more than 2%, as a hurricane closed US offshore oil and gas production and an industry report showed US crude inventories decreased.
Brent crude rose 85 cents, or 2.1%, to $41.38 a barrel by 0645 GMT, while US crude rose 92 cents, or 2.4%, to $39.20. Both contracts rose by more than 2% on Tuesday.
More than 25% of US offshore oil and gas output was shut and export ports were closed on Tuesday as Hurricane Sally sat just off the US Gulf Coast.
"Our current estimate for the total outage associated with the Sally weather system is between 3 million and 6 million barrels of oil over approximately 11 days," Rystad Energy said in a note.
That is likely to help reduce stockpiles although refineries were also shut down, cutting demand for oil.
US crude oil inventories fell by 9.5 million barrels last week, although gasoline inventories increased, data from industry group the American Petroleum Institute (API) showed on Tuesday.
Analysts had expected oil stocks to increase by 1.3 million barrels. Official data on US stockpiles is due out later on Wednesday and often conflicts with the industry figures.
"If we see a number similar to the ... drawdown the API reported overnight, it would likely provide some immediate support to the market," ING Research said.
However, oil producers and traders are painting a bleak picture for a recovery in global fuel demand as the COVID-19 pandemic rages on, hammering economies.
The International Energy Agency also reduced its forecast for oil demand this year on Tuesday, because of a cautious outlook for the economic recovery from the pandemic.
That came after the Organization of the Petroleum Exporting Countries said it expects world oil demand to fall more sharply that earlier forecast.
Imports of oil in August into Japan, the world's fourth-biggest importer of crude, fell by more than a quarter from a year earlier, official data showed on Wednesday.
Brent crude was at $42.11 a barrel, down 55 cents or 1.3% by 0642 GMT, after earlier sliding to $41.51, the lowest since July 30. US West Texas Intermediate crude skidded 64 cents, or 1.6%, to $39.13 a barrel after earlier dropping to $38.55, the lowest since July 10.
Brent crude fell 33 cents, or, 0.8% to $43.74 a barrel by 0630 GMT. The international benchmark contract has fallen 2.9% so far this week. US West Texas Intermediate (WTI) crude futures were down 35 cents or, 0.9% to $41.02 a barrel, and set for the first weekly drop in five weeks.
US West Texas Intermediate (WTI) crude futures were trading up 14 cents, or 0.4%, at $37.47 a barrel by around 0629 GMT. Brent crude was 6 cents, or 0.2%, higher at $39.89 a barrel.
Brent crude futures fell 67 cents, or 1.6%, to $41.55 a barrel at 0628 GMT, after climbing 4.2% on Wednesday. US West Texas Intermediate (WTI) crude futures were down 70 cents, or 1.7%, to $39.46 a barrel, after jumping 4.9% on Wednesday.
The pan-European STOXX 600 index was flat, while travel and leisure stocks shed the most among sectors with a 2.4% fall.
The dollar gave up gains made after the Federal Reserve upgraded its 2020 economic forecast this week to trade in negative territory on Thursday. It was last quoted at 92.923 against a basket of major currencies, on track for a 0.3% weekly loss.
Retail sales volumes rose by 0.8% in August, the Office for National Statistics said - slightly above the average 0.7% forecast in a Reuters poll - and, compared with a year earlier, they were up 2.8%, just below forecasts of 3.0% annual growth.
The benchmark Nikkei 225 index added 0.18 per cent, or 40.93 points, to close at 23,360.30 for a weekly loss of 0.20 per cent. The broader Topix index finished 0.49 per cent, or 8.02 points, higher at 1,646.42 for a weekly gain of 0.60 per cent.