Oil futures shook off early Thursday losses, with U.S. prices taking a breather after a four-day winning streak to settle unchanged for the session, while the global crude benchmark eked out a fresh finish at the highest in about seven weeks.
“With prices now back around summer highs, we are seeing some profit taking kicking in but the rally continues to look well supported,” said Craig Erlam, senior market analyst at Oanda, in a market update.
West Texas Intermediate crude for October delivery
settled flat at $72.61 a barrel on the New York Mercantile Exchange. That was the same price it settled at on Wednesday, which marked the highest finish since July 30, according to Dow Jones Market Data.
November Brent crude
the global benchmark, climbed 21 cents, or 0.3%, to $75.67 a barrel on ICE Futures Europe, ending the session at the highest since late July.
Crude has found support from a near-term tightening of supplies, amplified by the slow recovery in production in the Gulf of Mexico after Hurricane Ida, which made landfall on the Louisiana Gulf Coast on Aug. 29. Crude found further support this week as Hurricane Nicholas made landfall on the Texas coast, but the storm was seen doing little damage to rigs or infrastructure.
“As Nicholas spared U.S. production from further disruptions, it is difficult to see how oil prices can increase further in the near term, and the market is now likely on top of the curve before returning output drives prices lower — unless, of course, global supply suffers another surprise,” said Nishant Bhushan, oil markets analyst at Rystad Energy, in a note.
Crude got a boost Wednesday after the Energy Information Administration said that U.S. crude inventories fell by 6.4 million barrels for the week ended Sept. 10, a sixth consecutive weekly decline. The drawdown was larger than the average decline of 3.5 million barrels expected by analysts polled by S&P Global Platts forecast. The American Petroleum Institute on Tuesday reported a 5.4 million-barrel decrease.
The EIA on Wednesday also reported declines in gasoline and distillates, which include heating oil. On Thursday, October gasoline
lost nearly 1.2% at $2.18 a gallon, while October heating oil
edged up by 0.3% to $2.21 a gallon.
Surging European energy prices, meanwhile, are seen providing underlying support for crude and, in particular, natural gas. Prices for the fuel in Europe and the U.K. soared by double digits on Wednesday. On Thursday, CF Industries Holdings Inc.
shut down operations at two U.K. plants, citing high natural-gas prices.
“A combination of a broader demand recovery, lower inflows and falling indigenous production means that European gas inventories are well below average,” said Warren Patterson, head of commodities strategy at ING, in a note.
With the start of the winter heating season quickly approaching in the northern hemisphere, European storage is only 71% full, compared with the 5-year average of more than 86%, he said, its lowest levels in at least a decade going into winter.
In the U.S., natural-gas futures
closed at a 7 1/2-year high on Wednesday, but eased back on Thursday, with the October contract falling 2.3% to $5.335 per million British thermal units. Futures have rallied more than 21% so far in September.
On Thursday, the EIA reported that domestic supplies of natural gas rose by 83 billion cubic feet for the week ended Sept. 10, compared with the average increase of 79 billion cubic feet forecast by IHS Markit.