Oil gains after US stockpiles drop
TOKYO: Oil prices rose on Wednesday after industry data showed US stockpiles fell far more than expected, alleviating concerns about oversupply, while major US producers evacuated rigs in the Gulf of Mexico ahead of a brewing storm.
West Texas Intermediate (WTI) crude Clc1 had climbed 93 cents, or 1.6 per cent, to $58.76 by 0652 GMT, having earlier risen to $58.84. Brent LCOC1 was up 70 cents, or 1.1 per cent, at $64.86, after earlier touching $64.95.
The US and global benchmarks have gained this year as the Organization of the Petroleum Exporting Countries (Opec) and big producers such as Russia have curbed output to bolster prices.
However, ongoing trade tensions have raised fears about weaker demand, and investors have been on the lookout for signs that rapidly increasing US production is being consumed.
US crude stockpiles fell more than forecast last week, while gasoline inventories decreased and distillate stocks built, data from industry group the American Petroleum Institute (API) showed on Tuesday.
Crude inventories dropped by 8.1 million barrels in the week to July 5 to 461.4 million, compared with analyst expectations for a decrease of 3.1 million barrels, according to the data.
Official figures from the government’s Energy Information Administration (EIA) are due later on Wednesday.
“Prices are finely balanced right now as investors await fresh stimulus,” said Fawad Razaqzada, technical analyst at FOREX.COM. “The stimulus could come in the form of a sharp change in US crude oil inventories.”
US oil was also supported as major producers began evacuating and shutting in production in the Gulf of Mexico as a tropical disturbance may become a storm later on Wednesday or Thursday.