Oil prices steadied on Wednesday after trading higher on a bigger than expected drawdown in US crude stockpiles while economic headwinds from China and the euro zone capped gains.
Brent crude futures edged up 14 cents, or 0.16 per cent, to $86.38 a barrel by 1318 GMT, US West Texas Intermediate (WTI) crude futures gained 14 cents, or 0.17 per cent, to $82.95.
Both benchmarks hit their highest since April in the previous session but closed in negative territory after the US National Hurricane Center said Hurricane Beryl was expected to weaken into a tropical storm by the time it enters the Gulf of Mexico this week.
The current path looks set to avoid key infrastructure in the Gulf of Mexico, Panmure Gordon analyst Ashley Kelty said of the risks to supply disruption.
US crude oil inventories fell by 9.163 million barrels in the week ended June 28, according to market sources citing American Petroleum Institute figures on Tuesday. However, gasoline inventories rose by 2.468 million barrels and distillates fell by 740,000 barrels.
“This decline in crude levels might just have saved more of a sell-off after the hurricane news,” PVM Oil analyst John Evans said in a note.
Analysts in a Reuters poll had expected a draw of 700,000 barrels from crude inventories, a 1.3 million barrel drop in gasoline stocks and a 1.2 million barrel fall in distillates stocks.
The Energy Information Administration is due to release its weekly data at 1430 GMT.
Traders will also be focusing on US gasoline demand, which is expected to ramp up as the summer travel season picks up with the Independence Day holiday this week.
The American Automobile Association has forecast that travel during the holiday period will be 5.2 per cent higher than in 2023.
Elsewhere, surveys showed that China’s services activity expanded at the slowest pace in eight months and confidence hit a four-year low in June. Overall business growth across the euro zone also slowed sharply last month.
OPEC output also rose for a second consecutive month in June, a Reuters survey found on Tuesday, as higher supply from Nigeria and Iran offset the impact of voluntary supply cuts by other members and the wider OPEC+ alliance.
“OPEC+ was reported to have increased production in June despite pledges to keep quotas in check through the third quarter, and lingering concerns over a tepid recovery in China sent a bearish signal,” Panmure Gordon’s Kelty said.
Published 03 July 2024, 15:29 IST
