Drop in Cushing inventories sends oil prices higher

Crude oil prices were higher on Thursday after the Cushing storage facility, where West Texas Intermediate crude is delivered, was shown to have dropped 209,000 barrels in inventory last week even as total US stockpiles were higher on the week.

In addition, worries about Tropical Storm Lorenzo, which is expected to hit Mexico tomorrow, helped drive prices higher.

November contracts for WTI were up $2.56 to $82.86 per barrel on the New York Mercantile Exchange, while Brent crude for November delivery added $2.58 to $80.01 per barrel on the Intercontinental Exchange in London.

Nymex natural gas futures for November delivery, however, were 14 cents lower to $6.91 per million British thermal units after the US Energy Information Administration reported that natural gas in storage had added 74 billion cubic feet to 3.24 trillion cubic feet in the week ending 21 September.

While inventories of natural gas are below last year’s levels, they remain far above the five-year average of 2.97 trillion cubic feet, while the Natural Gas Supply Association said production of natural gas is expected to be up by 1.2 percent this winter over last year’s production.

Nymex October gasoline was 7 cents higher to $2.10 per gallon, while November heating oil was also up 7 cents to $2.27 per gallon