Oil up on declining U.S. oil stocks

Oil up on declining U.S. oil stocks

Crude oil prices rose on Wednesday due to expectations of a weekly decline in U.S. crude stocks, but fears that growing coronavirus infections could stifle demand.

Brent crude was up 47 cents or 0.68% at $69.5 a barrel by 08:05 GMT. U.S. oil gained 33 cents or 0.4% to $66.9 a barrel.

WTI traded at $66.88 a barrel at the same time for a 0.81% rise after ending the previous session at $66.34 per barrel.

Late Tuesday, the American Petroleum Institute (API) predicted a drop in U.S. crude oil stockpiles of 1.16 million barrels, compared to the market expectation of a fall of 1.26 million barrels.

A significant drop in inventories indicates an increase in crude demand in the U.S., the world’s largest oil consumer, assuaging market concerns over dwindling demand.

A weakening U.S. dollar also supported the upward oil price trend.

The U.S. dollar index, which measures the value of the American dollar against a basket of currencies including the Japanese yen, British pound, Canadian dollar, Swedish krona and Swiss franc, fell 0.05% to 93.08 on Wednesday.

The falling value of the dollar encourages oil-importing countries to buy more crude oil at lower dollar prices, driving up crude prices.

Oil prices have been in decline for the last five days due mainly to demand concerns, as growth in China, the world’s largest consumer, is being hampered by rising Delta variant cases and recent floods.

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Vestnik Kavkaza

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