Oil rises for second day as US crude inventories fall
LONDON: Oil prices edged higher for a second day on Wednesday after data showed US crude inventories fell more than expected last week, easing worries about oversupply that have dragged on markets in recent sessions.
Global benchmark Brent crude was up 50 cents, or 0.7 per cent, at $73.94 a barrel by 08:05 GMT, after gaining 0.5 per cent on Tuesday. US light crude was 5 cents higher at $68.57, having risen nearly 1 per cent in the previous session.
US crude and fuel stockpiles fell more than expected last week, industry group the American Petroleum Institute (API) reported late on Tuesday.
“The overnight API figures set a positive tone for oil prices with draws across the main inventory categories from crude to a sizeable decline in gasoline, which is seasonally the focal point as the driving season ramps up,” Harry Tchilinguirian, oil strategist for French bank BNP Paribas, told the Reuters Global Oil Forum.
US crude inventories fell by 3.2 million barrels in the week to July 20 to 407.6 million barrels, the API said, compared with analyst expectations for a decrease of 2.3 million barrels.
Crude stocks at the Cushing, Oklahoma, delivery hub fell by 808,000 barrels. Gasoline stocks fell by 4.9 million barrels, compared with analyst expectations in a Reuters poll for a 713,000-barrel drop.
Official figures from the US Department of Energy’s Energy Information Administration will be published at 10:30 am EDT (14:30 GMT) on Wednesday.
“Prices are moving higher after the API reported a more massive draw than analysts had expected,” said Stephen Innes, trader at brokerage OANDA.
Sentiment was also supported by an International Monetary Fund report about skyrocketing inflation in Venezuela, limiting its ability to boost oil output, Innes said.