Following news from the American Petroleum Institute (API) that US crude oil stockpiles had dropped significantly, oil prices increased somewhat in early morning trade. Amidst uncertainty, prices have been rising over the last three weeks.
A decline in US oil inventories would signal more demand. Hurricanes may also make it more difficult to get oil as the oil company continues to reduce output. While West Texas Intermediate (WTI) fell by 0.25% to $83.17, the price of ICE Brent increased by 0.01% to $86.61.
According to ING commodities strategists, the oil market was also supported by uncertainty around a possibly robust hurricane season in the US.
US crude oil stockpiles dropped by 9.2 million barrels over the previous week, according to the API data, above average market estimates for stocks to fall by roughly 1.3 million barrels.
Recent data from Mysteel OilChem shows that Chinese state and independent oil refiners may increase crude processing rates to a cumulative capacity of 69.4% in July, ING said.
Analysts stated that the state plants could boost rates by 1.2% month on month, while independent refiners may increase runs by 1.6% this month.
Meanwhile, US natural gas prices declined for a sixth consecutive session yesterday, with Front-month Henry Hub futures settling to the lowest level since the start of May. Forecasts for cooler weather in the central and eastern parts of the nation weighed on gas consumption prospects.
In the market yesterday, crude oil prices showed a mixed trend due to concerns about a potential conflict between Israel and the Iran-backed militia Hezbollah, as well as the possible impact of Hurricane Beryl on Gulf Coast refineries.
The Organization of Petroleum Exporting Countries (OPEC) and its allies, known as OPEC+, have been able to ‘manage the volatility of the oil market with several voluntary production cuts.
