Crude prices were hit by their biggest one-day percentage decline since August 15, as concerns fade about the potential fallout from Tropical Storm Gordon and markets brace for upcoming inventory updates.
On Wednesday, a barrel of West Texas Intermediate, the US standard, closed down $1.15, or 1.65 per cent, at $68.72. Brent, the international benchmark, closed off by 90 cents, or 1.15 per cent, to $77.27.
The declines come after Tropical Storm Gordon made landfall in the south-east US at a weaker-than-expected strength, allaying some fears about what disruptions it might cause to crude operations in the area.
Oil companies “shut a number of offshore platforms in anticipation of damage from the tropical storm — the market had anticipated the storm would strengthen to a hurricane,” OANDA analyst Dean Popplewell said in a note.
Markets are also awaiting the latest weekly update on US crude stockpiles, starting with the API report later this afternoon and official Energy Information Administration data from the US government on Thursday. Analysts surveyed by Thomson Reuters are expecting the EIA report to show a 1.3m barrel decline in crude stockpiles last week.