Oil prices up amid workers' strike in Norway, API data

By Azernews

By Nigar Abbasova

World oil prices resumed positive dynamics and jumped almost 2 percent on September 21, supported by a surprisingly sharp drop in U.S. crude reserves and strike of oil industry workers in Norway.

Brent crude futures were 90 cents up at $46.78 per barrel, while U.S. West Texas Intermediate (WTI) crude futures stood at $44.90 recording an increase of 85 cents. The price of a barrel of Azeri Light crude oil faced a decrease of $0.95 and stood at $46.78.

American Petroleum Institute’s (API) weekly crude stocks data, revealed a 7.5 million barrel fall to 507.2 million barrels in U.S. crude inventories, while analysts expected a growth of approximately 2.3 million barrels.

Attention of the black gold market is now focused on the official storage data, which is due to be published by the U.S. Energy Information Administration (EIA) in the short run. Analysts forecast an increase of 3.35 million barrels or 0.65 percent, which means that the volume will reach the level of 514.15 million barrels.

Moreover, traders are eagerly anticipating U.S. Federal Reserve's Federal Open Market Committee (FOMC) meeting, which might influence U.S. interest rates. Experts do not expect any change in rates, any indication from the Fed on the outlook for economic growth, however, could have an impact on the dollar, and in turn, on oil.

Also, North Sea output became under threat as more than 300 Norwegian oil service workers went on strike after wage talks broke down. The conflict in Norway, Western Europe's top crude and gas producer, may force oil firms to halt drilling of some wells on Norway's continental shelf and further hit production of the country.  

Oil market still remains oversupplied as exporters around the world pump near record amounts. OPEC is pumping out slightly more than 33.2 million barrels of crude oil per day, the volume, which is around its highest level ever.

Meanwhile, Russia, one of the world's leading oil producers, hit a record of crude production in September. Russian Deputy Energy Minister Kirill Molodtsev said the country increased its output up to approximately 11.085 million barrels per day.

The announcement came just ahead of the critical Algeria meeting, where OPEC members and other major producers outside the cartel are expected to discuss production freeze.

Analysts, however, remain skeptical of the ability of countries to reach an output freeze deal in late September, as some players of the market seek to reserve a right of production growth.