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Beijing and Houston: According to Reuters, oil prices increased on Thursday as gasoline inventories decreased, indicating increased demand, and as crude supplies decreased as US refineries increased processing. By 9:20 a.m. Saudi time, Brent futures had increased by 62 cents, or 0.73 percent, to $85.70 per barrel. The price of a barrel of US West Texas Intermediate crude increased by 60 cents or 0.73 percent.
According to Suvro Sarkar, head of DBS Bank’s energy sector team, “the bounce back is largely due to the continued drawdowns in US inventories as reported by the EIA,” referring to the Energy Information Administration.
In the week ending July 5, US oil stocks dropped by 3.4 million barrels to 445.1 million barrels, much above experts’ projections of a 1.3 million-barrel decline from a Reuters poll.
During the US Fourth of July vacation week, gasoline stockpiles dropped by 2 million barrels to 229.7 million barrels, a far larger decline than economists had predicted (600,000 barrels).
OPEC reiterated on Wednesday that robust economic growth and air travel would bolster gasoline use in the summer, maintaining its projection of a relatively high rise in global oil demand in 2024 and the following year.
In the interim, Sarkar said, “There will probably be more bullish factors than bearish ones, supporting oil prices.”
Profits were, however, limited because Hurricane Beryl barely affected supplies at refineries and offshore production plants.
Over the US Fourth of July holiday week, gasoline inventories dropped by 2 million barrels to 229.7 million barrels, a significant decrease from the 600,000 barrel dip analysts had predicted.
In addition, OPEC maintained its prediction that the world’s oil demand would rise very quickly in 2024 and the following year, stating on Wednesday that robust economic development and air travel would encourage the usage of gasoline during the summer.
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According to Sarkar, “there will probably be more bullish factors than bearish ones, supporting oil prices in the interim.”
However, gains were limited since Hurricane Beryl barely affected supply at refineries and offshore production sites.
Lower interest rates decrease the cost of borrowing, which can boost economic activity and oil demand.
Federal Reserve Chair Jerome Powell said on Wednesday the US central bank will make interest rate decisions “when and as” they are needed, pushing back on a suggestion that a September rate cut could be seen as a political act ahead of the fall presidential election.
