June 12, 2024 (MLN): Oil extended its upward leg on Wednesday after industry data pointed to shrinking US crude stockpiles.
Brent crude rose to $82.7 per barrel, up by 0.95% on the day. It is up more than 4% this week.
While West Texas Intermediate crude (WTI) was at $78.76 per barrel, up 1.10% on the day.
The American Petroleum Institute reported that US crude inventories dropped by 2.4 million barrels last week, according to people familiar with the data as reported by Bloomberg.
Official weekly inventory figures from the US Energy Information Administration are due later Wednesday.
Prices have rallied from last week’s selloff, even as the International Energy Agency on Wednesday warned of a lasting oil surplus for the rest of this decade.
The IEA also downgraded its oil demand growth forecast for this year to below 1m barrels a day.
Oil traders have been wrestling with bumpy price moves recently as a weak market for real-world barrels vies with hopes that consumption will improve over the summer.
The US on Tuesday forecast its production in 2024 will increase more than previously estimated to a fresh record.
There are also upcoming cues from the wider economic picture with US inflation data and Federal Reserve interest rate decision due later today.
“We see a sizeable deficit in the third quarter, which suggests that prices still have room to run higher,” said Warren Patterson, head of commodities strategy for ING Groep NV in Singapore. “The oil balance will be tight in the short term.”
