Crude oil prices moved higher on Thursday, driven by data showing a drop in gasoline inventories in the U.S, amid an increase in demand thanks to reopening of businesses in almost all the states in the country.
West Texas Intermediate Crude oil futures for July ended up $0.90, or about 2.7%, at $33.71 a barrel.
Brent crude futures moved up $0.55, or 1.6%, to $35.29 a barrel.
According to the data released by the U.S. Energy Information Administration (EIA), crude inventories were up 7.9 million barrels in the week ended May 22, as against expectations of a near 2-million barrels drop.
Gasoline inventories dropped by about 700,000 barrels last week, beating expectations for an increase of 100,000 barrels. Meanwhile, distillate stockpiles were up 5.5 million barrels in the week, about three times the expected jump.
The American Petroleum Institute (API) reported late Wednesday that stockpiles expanded by 8.7 million barrels for the week ended May 22, compared with analysts’ expectations for a draw of 1.9 million barrels.
The API report, which was released a day later than usual because of Monday’s Memorial Day holiday, also showed gasoline stockpiles rose by 1.1 million barrels, while distillate fuel inventories climbed by 6.9 million barrels.
Oil’s uptick was halted somewhat due to uncertainty about Russia continuing with its output reduction from July. The OPEC and other major producers, have however, stated that they would continue with production cuts till the end of the year.
There are worries about energy demand due to rising tensions between the U.S. and China, with the former warning that any effort by China to go ahead with its proposal to impose a new security law on Hong Kong could invite trade sanctions on the world’s second largest economy.
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