Oil prices gain after fall in U.S. crude inventories
U.S. West Texas Intermediate (WTI) crude futures were up 26 cents, or 0.4%, at $59.07 a barrel by 0258 GMT. They closed down 0.6% on Wednesday after hitting their lowest since March 12 at $56.88.
Brent crude futures, the international benchmark for oil prices, were up 14 cents, or 0.2 percent, at $69.59 a barrel. They fell nearly 1% in the previous session after dropping as low as $68.08.
Crude prices have been supported by output cuts by OPEC and other major producers as well as falling supplies from Iran, but signs of China’s readiness to escalate a trade war with the United States have raised concerns about future demand.
U.S. crude inventories fell by 5.3 million barrels in the week to May 24 to 474.4 million barrels, data from industry group, the American Petroleum Institute, showed. [API/S]
That was a much larger drop than the 900,000-barrel fall expected by analysts polled by Reuters.
Weekly U.S. oil inventory data has been delayed by Monday’s Memorial Day holiday, with the official data from the Energy Information Administration (EIA) due on Thursday at 11 a.m. EDT (1500 GMT). [EIA/S]
“If we do get a decent draw with U.S. inventories from the EIA report, we should see crude continue to stabilize,” Edward Moya, senior market analyst at OANDA in New York told Reuters in an email.
Crude prices remain supported by overall supply tightness.
Iranian May crude exports fell to less than half of April levels at around 400,000 barrels per day (bpd), tanker data showed and two industry sources said, after the United States tightened sanctions on Tehran’s main source of income.
Official data released on Thursday in Japan showed imports of Iranian surged more than 800 percent in April, from a year earlier, as refiners stocked up on crude from the country before the U.S. ended waivers on sanctions this month.
Many expect supply cuts led by the Organization of the Petroleum Exporting Countries (OPEC) and its allies, known as OPEC+, to be extended in a meeting next month.
Crude prices have risen by about 30 percent since the start of the year when OPEC+, which includes Russia, cut production to reduce a global glut.