Oil gains 3% on falling US crude stockpiles, rebounds from multi-month lows
Shafaq News/ Oil prices rose 3% on Wednesday, bouncing backfrom multi-month lows, after data showed a bigger-than-expected draw in U.S.crude stockpiles, even as worries about weak crude demand in China persisted.
Brent crude futures were up $2.13, or 2.8%, to $78.61 abarrel at 11:45 a.m. EDT (1545 GMT). U.S. West Texas Intermediate crude rose$2.36, or 3.22%, to $75.56.
U.S. crude stocks fell for a sixth week in a row, droppingby 3.7 million barrels to 429.3 million barrels last week, government datashowed,more than analysts' expectations in a Reuters poll for a 700,000-barrel draw.
"The story here really is that demand is stronger thanpeople thought and overall supplies are tighter," said Phil Flynn, ananalyst at Price Futures Group. "Crude supply is below average for thistime of year," he noted.
Industry data from the American Petroleum Institute (API) onTuesday had shown an unexpected build in crude and gasoline inventories.
On Monday, Brent slumped to its lowest since early JanuaryandWTI touched its lowest since February, as a global stock market rout deepenedon concerns of a potential recession in the U.S. after weak jobs data.
Both oil benchmarks broke a three-session declining streakon Tuesday.
"The recovery we have gotten from the large downturn onMonday shows it was a very short-lived temper tantrum and not a marketcrash," said Tim Snyder, chief economist at Matador Economics.
Tensions in the Middle East continued to stoke supplyconcerns on Wednesday, supporting prices.
The Middle East is bracing for a possible new wave ofattacks by Iran and its allies following last week's killing of senior membersof militant groups Hamas and Hezbollah, with concern rising that the conflictin Gaza is turning into a wider Middle East war.
U.S. officials have been in constant contactwithallies and partners in the region and there is a "clear consensus"that no one should escalate the situation, Secretary of State Antony Blinkensaid on Tuesday.
"Any escalation of the conflict in the Middle Eastcould see a greater risk of disruptions to supplies from the region," ANZanalyst Daniel Hynes said.
Supporting the bearish demand view, Chinese trade datashowed that July daily crude oil imports fellto the lowest level sinceSeptember 2022. China is the world's largest crude importer.
(Reuters)
