Energy Sector and Oil Spike as Global Oil Supply Drops for First Month in Four

Energy names kept overall market losses to a minimum on Wednesday, Sept. 13.

That was largely tied to solid gains in crude oil, sparked by signs of reduced global production. 

Global oil supplies have hit a snag in recent weeks as Hurricane Harvey limited output in the U.S. and declining activity in the Middle East helped the Organization of Petroleum Exporting Countries keep to its previous deal to limit production. 

Global oil supply fell by 720,000 barrels a day in August to 97.7 million barrels a day, its first drop in four months, the International Energy Agency said in its monthly report. Production among the Organization of the Petroleum Exporting Countries fell from its 2017 peak in July as the bloc took efforts to comply with its previous agreement. A monthly report from the cartel on Tuesday showed that production had fallen, largely attributed to output declines in Iraq, Libya, Gabon and Venezuela.

However, crude stockpiles in the U.S. have ballooned recently as Harvey crippled refinery production in the Texas and Louisiana region. U.S. supplies increased 5.9 million barrels in the past week, the Energy Information Administration reported Wednesday morning. Gasoline and distillates stockpiles both fell. 

West Texas Intermediate crude was up 1% to $48.71 a barrel on Wednesday morning.

Major oil producers were mostly higher on Wednesday morning, including Exxon Mobil Corp. (XOM) , Royal Dutch Shell PLC (RDS.A) , Chevron Corp. (CVX) , BP PLC (BP) , and Statoil ASA (STO) . The Energy Select Sector SPDR ETF (XLE) was up nearly 1%. 

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