Oil rises as larger-than-expected U.S. crude draw outweighs Covid-19 demand concerns
Oil prices ticked up on Wednesday as a massive drawdown in U.S. crude inventories countered persistent concerns about the coronavirus pandemic continuing to hurt fuel demand.
U.S. crude oil stocks dropped by nearly 10 million barrels last week to their lowest since March at 476.7 million barrels due to a sharp drop in imports, the Energy Information Administration said, compared with analysts’ expectations in a Reuters poll for a build.
Stocks at the U.S. storage hub and delivery point for crude futures in Cushing, Oklahoma, plunged by 2.3 million barrels.
Brent crude gained 34 cents to $56.25 a barrel. U.S. West Texas Intermediate (WTI) crude settled 24 cents, or 0.5%, higher at $52.85 per barrel.
Oil prices have recovered from record lows in April due to rising demand from the early months of the pandemic, particularly in China, and huge supply cuts by the Organization of the Petroleum Exporting Countries and its allies, known as OPEC+.
Prices could also benefit from lower U.S. oil production as a result of stricter industry regulations by the Biden administration, which is set to pause new oil and gas leases on federal land and cut fossil fuel subsidies as he pursues green policies.
Reference: CNBC
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