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Oil soars with US oil stocks and economic optimism

by Bunkerist
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After a higher-than-expected pull in US crude oil stocks,  the optimism of the recovery of the epidemic, and strong factory activities in the USA and China, Crude oil futures boosted gains on Wednesday, as it increased investor risk appetite.

US crude inventories are said to have declined by 6.4 million barrels within the week of 28 August  to around 501.2 million barrels, despite analysts’ expectations of a 1.9 million barrel draw.

Gasoline stocks also fell 5.8 million barrels, more than analysts’ estimates of 3.0 million barrels in the draw.

Brent crude LCOc1 futures rose 37 cents to $45.95 a barrel as of 0310 GMT, extending gains into a third day.

West Texas Intermediate futures CLc1 rose 34 cents to $43.10, following the previous day’s gain by 15 cents.

China’s factory activity also recorded the fastest expansion in nearly a decade in August, according to a special survey conducted on Tuesday and it is supported by manufacturers increasing production to meet again rising demand.

On the global supply side, oil production of the Organization of Petroleum Exporting Countries (OPEC) increased by about 1 million barrels a day in August.

As of May 1, OPEC and its allies, known as OPEC +, made a record cut of 9.7 million barrels a day, or 10% in global production, after a third of the world’s oil demand fell due to coronavirus measures. Starting by August 1, the cut was 7.7 million barrels a day through December.

The United Arab Emirates is believed to have pumped 2,693 million barrels above the OPEC + quota in August, and this high output is thought to limit the rise in oil prices as one of a reason.

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