Oil Prices Jump over US Demand Outlook, Hurricane
Oil prices edge higher in early morning trading after American Petroleum Institute (API) reported that US crude oil inventories fell sharply. Prices have been increasing in the past three weeks amidst uncertainties.
Slowdown in US crude inventories suggest demand would increase. At the same time, hurricane could tighten oil supply while the oil group maintains production cuts. ICE Brent price rose by 0.01% to reach $86.61, while West Texas Intermediate (WTI) price declined by 0.25% to $83.17.
Uncertainty over a potentially active hurricane season in the US also continued to support the oil market, ING commodities strategists said in a note.
API report showed that US crude oil inventories decreased by 9.2 million barrels over the last week, higher than the average market expectations for stocks to fall by roughly 1.3 million barrels.
Recent data from Mysteel OilChem shows that Chinese state and independent oil refiners may increase crude processing rates to a cumulative capacity of 69.4% in July, ING said.
Analysts stated that the state plants could boost rates by 1.2% month on month, while independent refiners may increase runs by 1.6% this month.
Meanwhile, US natural gas prices declined for a sixth consecutive session yesterday, with Front-month Henry Hub futures settling to the lowest level since the start of May. Forecasts for cooler weather in the central and eastern parts of the nation weighed on gas consumption prospects.
In the market yesterday, crude oil prices showed a mixed trend due to concerns about a potential conflict between Israel and the Iran-backed militia Hezbollah, as well as the possible impact of Hurricane Beryl on Gulf Coast refineries.
The Organization of Petroleum Exporting Countries (OPEC) and its allies, known as OPEC+, have been able to ‘manage the volatility of the oil market with several voluntary production cuts. Nigeria Pledges to Deepen Bilateral Relations with U.S.
