Oil gains on U.S. stock draw, economic recovery optimism
Crude oil futures extended gains on Wednesday after a bigger-than-expected draw in U.S. crude stockpiles and as solid U.S. and Chinese factory activity fuelled optimism of a recovery from the coronavirus pandemic, boosting investor risk appetite, Reuters reports.
Brent crude LCOc1 futures rose 45 cents to $46.03 a barrel as of 0559 GMT, climbing for a third day.
U.S. West Texas Intermediate futures CLc1 rose 43 cents to $43.19, following the previous day’s gain of 15 cents.
U.S. crude inventories fell by 6.4 million barrels in the week to Aug. 28 to 501.2 million barrels, the American Petroleum Institute (API) said, against analysts’ expectations for a draw of 1.9 million barrels.
Gasoline stocks also fell by 5.8 million barrels, more than analysts’ estimates of a draw of 3.0 million barrels.
Analysts had forecast a sixth weekly drawdown in U.S. crude inventories in a Reuters poll.
From May 1, OPEC and its allies, known as OPEC+, made a record cut of 9.7 million bpd, or 10% of global output, after the novel coronavirus destroyed one-third of world demand. From Aug. 1, the cut tapered to 7.7 million bpd until December.
The United Arab Emirates pumped 2.693 million bpd in August, above its OPEC+ quota, after hot weather and people holidaying at home drove associated gas demand for power generation, two sources familiar with the matter told Reuters.
“Higher output by the UAE capped gains in oil prices,” Nissan Securities’ Kikukawa said.