Oil climbs over 4% despite rise in US inventories


Brent crude futures rose US$2.88, or 4.2%, to settle at $72.23 a barrel. U.S. West Texas Intermediate (WTI) crude futures rose $3.1, or 4.6%, to settle at $70.30 a barrel.(File pic shows oil storage at Cushing, Oklahoma. - Reuters)

NEW YORK: Oil prices rose more than 4% Wednesday, extending gains from the previous session as improved risk appetite provided support despite data showing an unexpected rise in U.S. oil inventories.

Brent crude futures rose US$2.88, or 4.2%, to settle at $72.23 a barrel. U.S. West Texas Intermediate (WTI) crude futures rose $3.1, or 4.6%, to settle at $70.30 a barrel.

Futures are rebounding after dropping around 7% on Monday, following a deal by the Organization of Petroleum Exporting Countries and allies, together known as OPEC+, to boost supply by 400,000 barrels per day from August through December.

The sell-off was exacerbated by fears that a rise in cases of the Delta variant of the coronavirus in major markets like the United States, Britain and Japan would affect demand.

"Overall the OPEC agreement has crystallized what the market should expect as to the restoration of production," said Andy Lipow, president of Lipow Oil Associates. "However, even according to OPEC+ numbers, it's not enough to stem the overall world oil inventory decline, and to me, that is giving support to the market."

The price gains on Wednesday come despite a rise in U.S. crude stockpiles for the first time since May. Crude inventories rose unexpectedly by 2.1 million barrels last week to 439.7 million barrels, U.S. Energy Information Administration data showed. Analysts had expected a 4.5 million-barrel drop.

Still, gasoline and distillate inventories posted draws of 121,000 barrels and 1.3 million barrels, respectively.

"That crude oil build was obviously a surprise driven by a surge in imports and a plunge in exports," said John Kilduff, partner at Again Capital in New York. "The only positive aspects of the report remain strong gasoline demand and a rebound in distillate fuels."

JPMorgan analysts said global demand is expected to average 99.6 million barrels per day (mbd) in August, up by 5.4 mbd from April. But they also said: "We only see 4Q21 demand recovering another incremental 330,000 vs a normalised 2019 baseline as colder weather sets in for the northern hemisphere and peak travel season is behind us."- Reuters

Article type: metered
User Type: anonymous web
User Status:
Campaign ID: 46
Cxense type: free
User access status: 3
Join our Telegram channel to get our Evening Alerts and breaking news highlights

   

Next In Business News

Maxis posts higher service revenue, net profit in 2Q of 2021
FBM KLCI decline approaches 1,500
Taming multicloud chaos
MIER: Consumers’ finances worsen, job outlook weakens
MIER sees rocky road ahead for businesses
Ringgit opens marginally higher as greenback trades sideways
Bursa set to end July on weak note as KLCI extends losses
Maybank maintains 'buy', target price on Frontken
Lim Seong Hai Capital surges on LEAP Market debut
Robust earnings ahead for Tasco

Stories You'll Enjoy


Vouchers