HOUSTON: Oil prices roses on Wednesday after a jump in U.S. refining activity last week prompted a bigger draw than expected from gasoline and crude inventories.
Brent futures were up 66 cents, or 0.78%, at $85.32 a barrel at 11:18 a.m. EDT (1519 GMT), after falling 1.3% the previous session.
U.S. West Texas Intermediate (WTI) crude was up 86 cents, or 1.06%, to $82.27 a barrel, after falling 1.1% the previous session.
U.S. crude inventories fell by 3.4 million barrels to 445.1 million barrels in the week ended July 5, the U.S. Energy Information Administration said, far exceeding analysts’ expectations in a Reuters poll for a 1.3 million-barrel draw.
Gasoline stocks fell by 2 million barrels to 229.7 million barrels, much bigger than the 600,000-barrel draw analysts expected during U.S. Fourth of July holiday week.
“More than anything the EIA data seems to be the driving force right now for higher prices,” said Phil Flynn, analyst at Price Futures Group.
OPEC maintained its 2024 and 2025 global oil demand growth forecasts at 2.25 million barrels per day (bpd) and 1.85 million bpd, respectively, it said in a monthly report.
Oil prices slip after US crude hub escapes serious storm damage
“Expected strong mobility and air travel in the Northern Hemisphere during the summer driving/holiday season is anticipated to bolster demand for transportation fuels and drive growth in the United States,” OPEC said in the report.
Both crude futures contracts had ended the previous three sessions lower on signs that the Texas energy industry came off relatively unscathed from Hurricane Beryl.
Oil and gas companies had restarted some operations on Tuesday, and ports along the Texas Gulf Coast, which had shut in ahead of the hurricane, were reopening with some restrictions.
Refineries and offshore production facilities saw limited damage from the storm and have largely returned to normal operations, easing concerns of a supply disruption.
In the Middle East, Hezbollah chief Sayyed Hassan Nasrallah said Hamas was conducting Gaza ceasefire talks with Israel on behalf of the entire “Axis of Resistance.” If a deal was reached, Hezbollah would stop its operations with no need for separate talks, he added.
Hezbollah began firing at Israeli targets on the border in support of Palestinians after its ally Hamas launched the Oct. 7 attack on Israel that precipitated the war in Gaza.
An easing of geopolitical tensions would weigh on crude futures.
Concerns over demand in China also capped price gains as consumer prices in the world’s second-largest economy grew for a fifth straight month in June but missed expectations, while producer price deflation persisted.
In its annual Energy Outlook report on Wednesday, BP said it expects oil demand to peak next year and wind and solar capacity to grow rapidly in both of its two main scenarios.