Oil Rises on Expected Robust Demand in US
Crude oil prices rebounded on Wednesday after estimates of a massive weekly drop in US crude inventories. The market also rallied with support from prospects of another production cut by members of the Organisation of Petroleum Exporting Countries and allied (OPEC+) ahead of the group’s meeting on Friday.
In the global market, the international benchmark Brent crude traded at $85.64 per barrel early in the morning, translating to a 0.86% gain from the closing price on Tuesday of $84.91 per barrel.
The American benchmark West Texas Intermediate (WTI) traded at the same time at $82.06 per barrel, up 0.85% from the session close of $81.37 per barrel on Tuesday.
Investor risk appetite was constrained after Fitch cut the US credit rating, citing fiscal deterioration, but a big plummet in US commercial crude oil stockpiles mitigated concerns, as a robust stockpile draw signals solid oil demand in the world’s top oil-consuming economy.
Inventories as estimated by the American Petroleum Institute (API) is expected to contract by around 15.4 million barrels in July, higher than the market forecast of a drop of 900,000 barrels.
However, demand in China is still on investors’ watchlists as the country tries to recover from pandemic-era demand weakness.
Analysts say worrisome economic data from China may lead to another output cut decision by the OPEC+ group during its meeting on Friday.
Meanwhile, the API data showed a drop in gasoline inventories of 1.7 million barrels, compared with estimates for a 1.3 million barrel decline. Distillate stocks fell by 510,000 barrels. #Oil Rises on Expected Robust Demand in US Russia Writes off $23bn Debt for Africa – Putin