Oil up on lower U.S. stocks, firmer demand
Oil prices firmed on Wednesday on signs of improving demand and a drawdown in U.S. crude inventories, but worries over the economic fallout from the coronavirus pandemic and weak refining margins capped gains, Reuters reports.
Brent crude futures LCoc1 were up 86 cents, or 2.48%, at $35.51 per barrel at 1219 GMT.
U.S. West Texas Intermediate (WTI) July crude futures CLc1 were up 75 cents, or 2.35%, at $32.71 a barrel.
The WTI June contract expired on Tuesday at $32.50 a barrel, up 2.1%, avoiding the chaos of last month’s May expiry, when prices sank well below zero.
U.S. crude inventories fell by 4.8 million barrels to 521.3 million barrels in the week to May 15, data from the American Petroleum Institute (API) showed on Tuesday. [API/S]
Easing of lockdown restrictions worldwide are boosting demand for fuels, while initial shipping data shows that compliance with oil production cuts from the Organization of the Petroleum Exporting Countries and its allies has been strong so far.
But weak crude refining profits persist, which could delay a recovery in oil demand.