Oil Prices Rise as Stockpiles Decrease, Supply Tightens
EghtesadOnline: Oil prices on Wednesday extended the previous day's small gains after an industry report showed US crude stockpiles fell last week, overriding trader and investor concerns about transportation curbs in some countries as Covid-19 cases surge.
Brent crude was up 31 cents, or 0.4% at $75.07 a barrel, after edging higher on Tuesday. US crude was up 46 cents, or 0.6% at $73.44 a barrel, having risen 0.1% in the previous session, Reuters reported.
While the highly contagious Delta variant of the coronavirus is taking hold in many countries, prompting new lockdowns or movement restrictions from Australia to Portugal, hopes of a broader recovery in demand for fuel remained intact.
On the last day of June, Brent is heading for another monthly gain, which would mean the contract has risen for six out of the last seven months. US crude has traded similarly since November.
"Futures have been trading on a one-way ripper to the upside ever since the November 2 headline declaring a Covid-19 vaccine had been developed," said Bob Yawger, director of energy futures, at Mizuho Securities.
Crude stocks in the United States were down by 8.2 million barrels, American Petroleum Institute data showed, according to two sources, who spoke on condition of anonymity.
Still, gasoline inventories rose by 2.4 million barrels and distillate stocks were up by 428,000 barrels, the sources said.
But hopes for a broad recovery received a boost from OPEC Secretary-General Mohammad Barkindo who said on Tuesday that demand is expected to rise by 6 million barrels per day in 2021, with 5 million bpd of that coming in the second half of the year.