Oil prices climb on hurricane shutdown, inventories drop

Oil prices extended gains on Wednesday as a hurricane suspended U.S. offshore oil and gas refineries in the Gulf of Mexico and crude inventories declined.

Brent crude rose 0.4%, or 15 cents, at $40.68 per barrel. U.S. crude climbed 0.5%, or 18 cents, at $38.46 per barrel. Both contracts gained over 2% in the last session.

A quarter of U.S. offshore oil and gas output was disrupted and export ports were shut as Hurricane Sally approached the U.S. Gulf Coast.

U.S. crude oil stocks fell by 9.5 million barrels last week, while gasoline stockpiles rose, according to the American Petroleum Institute.

Analysts had estimated oil stocks to rise by 1.3 million barrels. Investors are waiting for the official data on U.S. stocks due later on Wednesday.

Meanwhile, producers and traders are expecting a bleak outlook for fuel demand recovery as the coronavirus crisis continues and economies remain battered.