Oil prices edged higher on Wednesday, extending gains from the previous session after industry data indicated U.S. crude stocks fell much more than expected last week, reinforcing bullish views on fuel demand in the world’s largest economy.
U.S. West Texas Intermediate (WTI) crude futures rose 48 cents, or 0.7%, to $66.17 a barrel at 0440 GMT, after climbing to $66.58, a level not seen since March 8.
Brent crude futures were up 49 cents, or 0.7%, at $69.37 barrel after touching a more than the seven-week high of $69.78 earlier in the session.
Both benchmark contracts rose nearly 2% on Tuesday, ahead of data from the American Petroleum Institute (API) industry group.
U.S crude oil Stocks Decline
API figures showed crude stocks fell by 7.7 million barrels in the week ended April 30, according to two market sources. That was more than triple the drawdown expected by analysts.
“The energy demand outlook is brightened by eased lockdown measures in parts of the U.S. and UK, which helped to offset concerns over lower demand from India and Japan. The upcoming summer driving season may further boost fuel demand and support oil prices.” Margaret Yang, strategist, Singapore-based DailyFX
Traders are awaiting data from the U.S. Energy Information Administration due at 10:30 a.m. EDT (1430 GMT) on Wednesday to see if official data shows such a large drawdown. If confirmed by government figures will be the largest drop since late January.
The rise in oil prices to nearly two-month highs has been supported by COVID-19 vaccine rollouts in the United States and Europe, paving the way for pandemic lockdowns to be lifted and air travel to pick up.
The U.S. has set a new target of 70% of U.S. adults receiving at least one Covid-19 vaccine shot by July 4, while British Prime Minister Boris Johnson said his country’s lockdown rules are will be scrapped in seven weeks.
However, the Covid-19 crisis in India may yet worsen, with some research models projecting the death toll could more than double. According to analyst, the nation’s oil imports may tumble by more than 1 million barrels a day to 3.1 million in the coming weeks.
