Oil prices rise amid a big draw in US oil stocks

3 Jul 2024 , 09:56 AM

Oil prices rose in early Asian trade on Wednesday as industry data indicated a larger-than-expected reduction in U.S. crude stocks, raising hopes for steady fuel demand during the summer driving season in the world’s largest oil consumer.

Brent crude oil futures rose 16 cents, or 0.2%, to $85.60 a barrel at 0033 GMT. US West Texas Intermediate oil futures increased 14 cents, or 0.2%, to $82.95 a barrel.

Both benchmarks closed lower on Tuesday as concerns about Hurricane Beryl disrupting Gulf of Mexico production dissipated.

U.S. crude oil stockpiles declined by 9.163 million barrels in the week ending June 28, according to market sources quoting American Petroleum Institute data on Tuesday. However, petrol stockpiles increased by 2.468 million barrels, while distillates declined by 740,000 barrels.

A Reuters poll predicted a 700,000-barrel reduction in crude stockpiles, a 1.3 million-barrel decline in petrol supplies, and a 1.2 million-barrel drop in distillate stocks.

The Energy Information Administration, the US Department of Energy’s statistical arm, is scheduled to release weekly data on Wednesday at 1430 GMT.

U.S. petrol demand is projected to rise as the summer travel season begins this week with the Independence Day vacation. The American Automobile Association predicts that travel during the holiday season will be 5.2% higher than in 2023, with car travel at 4.8%.

On the supply side, OPEC’s (OPEC) oil output increased for the second consecutive month in June, according to a Reuters survey released on Tuesday, as higher supply from Nigeria and Iran offset the impact of voluntary supply cuts by other members and the wider OPEC+ alliance.

Hurricane Beryl, which is racing through the Caribbean Sea, is forecast to diminish into a tropical storm before entering the Gulf of Mexico late this week, according to the National Hurricane Centre.

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