Oil prices gain due to decline in US crude oil inventory

24 Apr 2024 , 09:43 AM

Early trade on Wednesday saw oil prices rise, building on gains from the previous session. This was due to industry data indicating an unexpected decline in U.S. crude stocks last week, which was a sign of strong demand and a change in focus away from the wars in the Middle East.

U.S. West Texas Intermediate crude futures climbed 10 cents, or 0.11%, to $83.45 a barrel, while Brent crude futures increased by 9 cents, or 0.1%, to $88.51 a barrel.

The American Petroleum Institute reported that for the week ending April 19, U.S. oil stockpiles decreased by 3.237 million barrels. These reports were cited by market sources. On the other hand, an increase of 800,000 barrels was anticipated by six analysts surveyed by Reuters.

In order to validate the significant decrease, traders will be observing the official U.S. data on oil and product stockpiles, which is scheduled for release at 10:30 a.m. (1430 GMT).

As for the UK and the EU, there is rising confidence that interest rates will be lowered in June. This might boost economic expansion and, consequently, oil demand.

Business activity in the United States dropped to a four-month low in April, according to S&P Global, which reported on Tuesday. The manufacturing and services sectors are tracked by the flash Composite PMI Output Index, which dropped to 50.9 this month from 52.1 in March.

In early trade on Wednesday, traders mostly disregarded the most recent developments in the Middle East, where locals said that Israeli strikes in Gaza intensified in some of the worst bombardment in weeks.

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