Sept. 20 (UPI) -- Crude oil prices were moving considerably higher early Wednesday on lower-than-expected levels of oil held in storage, though the market may be overheating.
The American Petroleum Institute reported late Tuesday that crude oil inventory levels rose last week in the United States by 1.4 million barrels. That's lower than the 2.4 million barrels expected by commodity pricing group S&P Global Platts.
The global market for oil is adjusting to Hurricanes Harvey and Irma in the United States, which delayed seasonal factors that would normally send crude oil prices lower. About 2 percent of the nation's refining sector is still down because of Harvey, while the market for refined products like gasoline tries to adjust because of the impact from Irma.
Platts Oil Futures Editor Geoffrey Craig said in a report emailed to UPI that inventory levels could reflect the impacts from Harvey for another few weeks because of the time it will take refiners, terminals and ports to return to normal.
The market early Wednesday was still adjusting to non-hurricane related issues in the United States. A spokesperson for BP said its Thunderhorse platform in the Gulf of Mexico was closed because it lost power Monday. Valero Energy Corp. said a fire broke out at its Port Arthur, Texas, refinery late Tuesday morning, though a spokesperson confirmed to UPI the fire was contained and later extinguished.
The price of Brent crude oil was up 1 percent to $55.69 per barrel as of 9:10 a.m. EDT. West Texas Intermediate, the U.S. benchmark for the price of oil, held its grip on a psychological threshold by gaining 0.9 percent from the previous close to trade at $50.40 per barrel.
Over the past two weeks, Platts estimated total crude oil stocks in the United States rose by 10.5 million barrels, while gasoline and distillates levels declined by a combined 16.2 million barrels. Traders look at those figures to get an indication of supply and demand metrics that would influence the price of oil.
Ole Hanson, the head of commodity strategy at Saxo Bank, told UPI the rally for Brent, at least, may "run out of juice" pretty soon.
"This is an unseasonal rally driven by unseasonal high refinery margins in response to falling fuel stocks," he said. "The price is likely to remain supported until refinery and stock levels begin to normalize."
Markets will be influenced later in the morning when official data on inventories are released by the U.S. Energy Information Administration. API data tends to be more bullish than official figures.