Oil rises as U.S. inventory drop offsets weak China demand

by Jonathan Adams
Oil rises

Brent crude oil futures was up 27 cents, or 0.32%, to $84.00 a barrel and U.S. West Texas Intermediate crude futures added 35 cents, or 0.43%, to $81.11

Oil prices rose on Wednesday, a day after benchmark Brent reached a one-month low, as a decline in U.S. oil stockpiles helped offset signs of weakening demand in China.

Brent crude oil futures were up 27 cents, or 0.32%, to $84.00 a barrel by 0800 GMT. U.S. West Texas Intermediate crude futures added 35 cents, or 0.43%, to $81.11.

Both benchmarks declined in the three previous sessions, with Brent crude futures trading as low as $83.30 on Tuesday, the lowest since June 17.

In the US, the world’s biggest oil producer and consumer, crude oil inventories dropped by 4.4 million barrels in the week ended July 12, market sources said, citing data from the API.

Analysts polled by Reuters estimated crude stocks would drop by 33,000 barrels. The U.S. EIA will release its official storage report at 1430 GMT.

The government data this afternoon is where the real story is, but the precursor of U.S. oil stocks in the API data does not exactly show much of an impact of Hurricane Beryl and the shutting down of some the infrastructure that stood in its path, according to PVM Oil analyst John Evans.

Aiding oil prices were U.S. retail sales, which were unchanged in June as a decline in receipts at auto dealerships was offset by broad strength elsewhere, a display of consumer resilience that bolstered economic growth prospects for the second quarter.

Rising geopolitical risk is also helping crude prices.

A Liberia-flagged oil tanker was evaluating damage and investigating a potential oil spill after it was attacked in the Red Sea, the Red Sea and Gulf of Aden Joint Maritime Information Center (JMIC) said on Tuesday.

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