Oil prices climb after U.S. inventory drop signals demand rise
Oil prices rose on Wednesday after an industry report showed crude stockpiles in the United States staged a bigger drop than expected, suggesting demand is improving even as the coronavirus outbreak spreads around the world.
Brent crude rose 31 cents, or 0.8%, to $41.58 a barrel by 0632 GMT after declining more than 1% on Tuesday. U.S. crude was up 35 cents, or 0.9%, at $39.62 a barrel, having dropped by 1.1% in the previous session.
U.S. crude and gasoline stocks fell more than expected last week, while distillate inventories rose, data released by the American Petroleum Institute (API) late on Tuesday showed.
Crude inventories dropped by 8.2 million barrels to 537 million barrels, against analysts’ forecasts for a draw of 710,000 barrels, Reuters reported.
Also supporting prices was a drop in output from the Organization of the Petroleum Exporting Countries (OPEC) to the lowest in two decades in June.
The 13-member grouping produced an average of 22.62 million barrels per day (bpd) in June after they agreed to cut output, a Reuters survey found, down 1.92 million bpd from May’s revised figure.