Oil rises on U.S. fuel drawdowns despite surging coronavirus cases

Wednesday,   28-Jul-2021   09:13 AM (IST)

Oil prices climbed on Wednesday after industry data showed U.S. crude and product inventories fell more sharply than expected last week, reinforcing expectations that demand will outstrip supply growth even amid a surge in COVID-19 cases. U.S. West Texas Intermediate (WTI) crude futures rose 43 cents, or 0.6%, to $72.08 a barrel at 0119 GMT, reversing Tuesday’s 0.4% decline. Brent crude futures rose 38 cents, or 0.5%, to $74.86 a barrel, after shedding 2 cents on Tuesday in the first decline in six days. Data from the American Petroleum Institute industry group showed U.S. crude stocks fell by 4.7 million barrels for the week ended July 23, gasoline inventories dropped by 6.2 million barrels and distillate stocks were down 1.9 million barrels, according to two market sources, who spoke on condition of anonymity. That compared with analysts’ expectations for a 2.9 million fall in crude stocks, following a surprise rise in crude inventories the previous week in what was the first increase since May. Traders are awaiting data from the U.S. Energy Information Administration (EIA) on Wednesday to confirm the drop in stocks. On gasoline stocks, analysts had expected a 900,000 barrel decline drop in the week to July 23. Fuel demand expectations are undented by soaring cases of the highly infectious Delta variant of the coronavirus in the United States, where the seven-day average for new cases has risen to 57,126. That is about a quarter of the pandemic peak.