Oil prices drifted higher on Wednesday, anticipating a report of low U.S. oil stocks. While expectations of solid demand in the upcoming driving season also lent support.
Brent crude futures for August were up 40 cents, or 0.3%, at $120.97 a barrel at 0649 GMT. After closing on Tuesday at their highest since May 31. U.S. West Texas Intermediate crude for July was at $120.01 a barrel, up 60 cents, or 0.5%. After reaching its highest settlement since March 8 in the previous session.
Analysts polled by Reuters expect data for last week to show another drawdown of U.S. crude inventories. However, with gasoline and distillate, stocks could edge higher. However, figures from the American Petroleum Institute showed that U.S. crude and oil product inventories rose last week.
The World Bank on Tuesday slashed its global growth forecast by nearly a third. Many countries now faced recession after warning that Russia’s invasion of Ukraine had compounded the damage from the COVID-19 pandemic.
Meanwhile, global crude and oil product supplies remain tight, boosting Asian refiners’ diesel margins to record levels. As western sanctions hamper exports from major producers in Russia.
The CEO of global commodities trader Trafigura said oil prices could soon hit $150 a barrel. And go higher this year, with demand destruction likely by the end of the year.
On Tuesday, China topped up its first batch of product export quotas. Which is aimed at reducing high domestic inventories, which have risen as pandemic lockdowns have dented demand. Despite the latest additions to the quotas, their volumes remain much lower than last year, however.
-Reuters.
