Crude oil futures were higher in mid-morning trade in Asia Sept. 15 after a storm-related power outage shut the US' largest oil pipeline and the International Energy Agency released a bullish oil demand outlook for 2022.
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At 10:25 am Singapore time (0225 GMT), the ICE November Brent futures contract was up 28 cents/b (0.38%) from the previous settle at $73.88/b, while the NYMEX October WTI contract was 30 cents/b (0.43%) higher at $70.76/b.
The Colonial Pipeline, a major supplier of refined products to the US East Coast that carries 1.5 million b/d of gasoline products from Houston to Greensboro, North Carolina on Line 1 and 885,000 b/d of refined products from Greensboro into New York Harbor on Line 2, shut its main gasoline and distillate line Sept. 14 due to a power outage caused by Hurricane Nicholas, which was subsequently downgraded to a Tropical Storm.
Around 720,217 b/d or 39.6% of Gulf of Mexico output remains shut in following Ida, the US Bureau of Safety and Environmental Enforcement said Sept. 14.
The disruptions were reflected in American Petroleum Institute data released late Sept. 14 that showed a 5.44 million-barrel draw in US crude inventories for the week ending Sept. 10, while gasoline inventories fell 2.76 million barrels and distillate stocks fell 2.89 million barrels.
"Oil prices continue to find strength with a larger-than-expected drawdown in crude oil inventories shown from the API data," IG market strategist Yeap Jun Rong said Sept 15.
On the demand side, the International Energy Agency Sept. 14 raised its global oil demand estimate for 2022 by 100,000 b/d to 99.4 million b/d and now sees demand rising by 5.2 million b/d in 2021 and 3.2 million b/d in 2022, a 105,000 b/d cut and 85,000 b/d increase, respectively.
"Signs are emerging of COVID-19 cases abating, with demand now expected to rebound by a sharp 1.6 million b/d in October and continuing to grow until end year," the IEA said in the report, adding that strong pent-up demand and continued progress in vaccination programs should underpin a robust rebound from the fourth quarter.
This came a day after OPEC hiked its forecast for 2022 global demand growth to 4.15 million b/d from 3.28 million b/d a month earlier and projected global oil demand would exceed pre-pandemic levels in 2022.