WTI sinks in the psychological $70 area

WTI is trading  0.44% lower at $70.28 and has travelled between a low of $70.01 and a high of $71.19

Another storm threatens the US energy hub in the Gulf of Mexico named 'Nicholas' which has made landfall in Texas after being upgraded to a hurricane and will add to existing problems for coastal refineries and petrochemical facilities.

Meanwhile, the IEA cut its demand forecast for the third quarter, having highlighted that global oil supplies fell by 540k barrels a day in August thanks to unexpected disruptions and thus wiping out extra supply from OPEC+.

The IEA's Oil Market Report for September showed headline inventories down 34 million barrels month over month, to 2,850 million barrels in July, and are overall 516 mb/d undersupplied compared with the 2015 to 2019 average in the month.

Reuters reported that crude, gasoline and middle distillate inventories are drawing 40 million barrels month over month and undersupplied by 1,255 mb/d versus norms, to 2,010 million barrels, which is 113 million barrels below the 2015 to 2019 average of 2,123 million barrels.

''Middle distillate inventories during the month posted a strong showing after months of lag, declining 11 million barrels month over month to 571 million barrels, undersupplied by 813 mb/d versus norms and bringing stocks below the 2015-2019 average of 581 million barrels for the first time since March 2020, according to TPH.

Meanwhile, gasoline inventories were also undersupplied versus norms at 285 mb/d, with inventories drawing 15 million barrels month over month to 367 million barrels, which is below the 2015 to 2019 range with a lower bound of 372 million barrels.''

OPEC under eye

Meanwhile, analysts at TD Securities explained that l concerns are also brewing that OPEC+ may not manage to raise production, despite the group's plan to continue raising its output, as Russia's total production is struggling to keep up with its quota.

''On the horizon, more modest demand growth will see the market find balance, leading to concerns for energy traders as consensus expectations should see the market shift out of a deficit and into balance in coming months, but the upside for energy markets resides in supply risks.''