Oil ticks up as drop in US crude and gasoline stocks exceeds view
2023.06.27 21:19
© Reuters. FILE PHOTO: A view shows oil pump jacks outside Almetyevsk in the Republic of Tatarstan, Russia June 4, 2023. REUTERS/Alexander Manzyuk//File Photo
By Arathy Somasekhar
(Reuters) – Oil prices edged higher on Wednesday as markets worried about supply tightness in the U.S., the world’s biggest oil consumer, after data showed a larger-than-expected draw in its crude and gasoline inventories.
futures rose 32 cents, or 0.4%, to $72.58 a barrel at 0002 GMT, while U.S. West Texas Intermediate (WTI) futures gained 23 cents, or 0.3%, to $67.94 a barrel.
Both contracts had fallen about 2.5% in the previous session on signals that central banks may not be done with interest rate hikes.
Crude stocks fell by about 2.4 million barrels in the week ended June 23, according to the market sources, citing data from industry group American Petroleum Institute. Analysts had expected a draw of 1.76 million barrels.
Gasoline inventories fell by about 2.9 million barrels, compared with estimates for a draw of 126,000.
That comes after a clash between Moscow and Russian mercenary group Wagner led to concern about possible oil supply disruptions and as markets await Saudi Arabia’s pledged oil output cut from July.
On the demand side, European Central Bank President Christine Lagarde said on Tuesday that stubbornly high inflation will require the bank to avoid declaring an end to rate hikes. Higher interest rates can weigh on economic activity and oil demand.
A rise in U.S. consumer confidence in June also worried markets that the Federal Reserve will likely have to continue raising interest rates.
Markets also awaited data due on Wednesday on China’s industrial profits to gauge the strength of the world’s second-biggest economy.
