Oil prices rose Wednesday after industry data showed US crude and product inventories fell more than expected last week, bolstering expectations that demand will outpace supply growth despite a surge in COVID-19 infections.
Brent crude futures, which lost 2 cents in its first drop in six days on Tuesday, rose 28 cents, or 0.4%, to $74.76 a barrel at 0506 GMT.
West Texas Intermediate (WTI) crude futures were up 33 cents, or 0.5%, at $71.98 a barrel, reversing Tuesday’s 0.4% decline.
Crude oil prices were not very volatile ahead of US inventory data from the EIA on Wednesday as the spread of delta-type coronavirus cases is offset by controlled supply.
Data from the American Petroleum Institute industry group showed that US crude inventories fell by 4.7 million barrels in the week of July 23, gasoline stocks fell by 6.2 million barrels and distillate stocks fell by 1.9 million barrels. Analysts had expected a 900,000-barrel drop in gasoline inventories for the week of July 23.
That compares within last week that crude stockpiles’ first suprising increase since May, and analysts expectation of 2.9 million drop.
Traders are waiting for data from the US Energy Information Administration (EIA) to confirm the decrease in stocks. A more significant drop than expected could test Brent and WTI to the upside.
Increasing cases of the highly contagious Delta variant of the coronavirus are curbing fuel demand expectations in the United States, the world’s largest oil consumer, where the seven-day average for new cases rose to 57,126, about a quarter of the peak of the pandemic.
The International Monetary Fund on Tuesday kept its forecast for 6% global growth for 2021, improving its outlook for the United States and other wealthy economies, while lowering forecasts for developing countries battling rising COVID-19 infections.
