NEW YORK (Reuters) – oil prices rose more than 4% on Wednesday on signs of an improving demand and a drawdown in U.S. crude inventories, but the gains were limited by worries about the economic impact of the corona-virus-pandemic, and weak refining margins.
FILE PHOTO: The sun behind an oil pump outside of Saint-Fiacre in Paris, France, August 28, 2019. REUTERS/Christian Hartmann
Brent crude oil futures LCoc1 were up $1.38, or 3.98%, at $36.03 per barrel by 10:54 am ET (1454 GMT), while U.S. West Texas Intermediate (WTI) for January crude oil futures CLc1 were up $1.38, or 4.32%, at $33.34 a barrel. Both benchmarks rose more than 5% of the duration of the session.
The WTI June contract expired on Tuesday at $32.50 per barrel, or 2.1%, avoiding the chaos of the past month May strike, when prices sank well below zero, as the storage in the U. s. filled quickly.
U. s. crude oil inventories fell by 5 million barrels in the week ending 15. September to 526.5 million barrels, Energy Information Administration data showed, compared with analysts ‘ expectations, the rise in a Reuters poll for a 1.2 million barrel. [EIA/S]
Crude oil inventories at the Cushing, Oklahoma, delivery hub fell by 5.6 million barrels last week, EIA said.
“The acceleration and torque restrictions in the world is boosting the demand for fuel during the first official data that the compliance of the oil-production cuts from the organization of petroleum Exporting countries and their allies, has been strong so far.
But the weak crude oil refining profits, which is a delay a recovery in oil demand. Refineries will have the hope of easing, or lock-boost gasoline demand.
U.S. gasoline and distillate inventories increased last week, EIA data showed.
“I see the product and build-that-can-take-away-a-little-bit-of-the bullish, the direction is from the report … we need more evidence, instead of seeing a rebalancing, especially due to the demand,” said Gene McGillian, managing Director of Market Research at Tradition Energy in Stamford, Connecticut.
Persistent concerns about the economic impact of the corona-virus-pandemic, especially in the United States of America is the world’s largest oil consumer, was also a member of the profits.
U.S. Federal Reserve chair, and Jerome Powell said on Tuesday that layoffs of state and local governments will slow the U.S. economic recovery.
“Both WTI and they have already recovered from this, what levels are you realistically could in the last three weeks and now have both stabilized between 30 and 35 USD,” said Rystad Energy as, senior oil markets analyst, Good Team Masiu.
“From now on, unless there is a major event, the table in the supply-balance ratio (as a new, EFFECTIVE website, or a longer cuts are possible, new block have an impact on the demand, we expect prices to remain around current levels.”
Additional reporting by Jessica Resnick-Ault, ghaddar’s, Ahmad, and Jane Chung; editing by Bernadette Baum