The oil prices rose more than 2% on Wednesday, due to a bigger-than-expected weekly drop in crude stocks. USA as a weaker dollar overshadowed signs of slower economic growth in China.
The futures of the Brent gained $1.35, or 1.61%, to $85.08 a barrel, while U.S. crude futures West Texas Intermediate (WTI) advanced $2.09, or 2.59%, to $82.85.
On Tuesday, Brent closed at its lowest level since June 14 and WTI at its lowest since June 21. The Brent premium over WTI narrowed to around $3.74 a barrel, the lowest since October 2023. The narrowing spread means energy companies have less reason to spend money to send ships to USA to collect crude oil for export.
China’s results and the Fed’s decision
“The weakest economic results of China and the growing expectations of a interest rate cut in state Joined “In the months ahead, they have countered each other,” the independent oil analyst told Reuters. Gaurav Sharma.
In USA, The world’s largest producer and consumer of oil, crude inventories fell by 4.4 million barrels in the week ended July 12, according to market sources, citing data from the American Petroleum Institute (API).
In this regard, analysts consulted by Reuters estimated that crude oil stocks would have fallen by 33,000 barrels, although the Energy Information Administration (EIA) of USA will publish its official inventory report this afternoon.
“The Government’s data this afternoon is where the real story is, but the precursor to the US oil stocks in the API data does not exactly show a big effect of the Hurricane Beryl and the closure of some of the infrastructures that stood in its way,” said the analyst. PVM Oil John Evans.
In favor of oil prices were the retail sales in USA, which remained unchanged in June as a decline in revenue at auto dealerships was offset by broad strength elsewhere, a sign of consumer resilience that bolstered the outlook for economic growth in the second quarter.
The geopolitical situation continues to influence prices
The increase of the geopolitical risk is also helping crude oil prices. A Liberian-flagged oil tanker was assessing damage and investigating a possible oil spill after being attacked by Houthis in Yemen in it Red Sea, As reported on Tuesday by the Joint Red Sea and Gulf of Aden Maritime Information Centre (JMIC).
While, China, the main importer of Petroleum The world’s largest economy grew 4.7% in the second quarter, official data showed earlier this week, the slowest growth since the first quarter of 2023, limiting gains in crude prices.
Source: Ambito
