Futures Movers: Oil prices buoyed by industry data showing U.S. crude inventory drop

Posted By: EN Todayon: August 09, 2023In: General Energy News, Oil & Gas News

Oil futures rose Wednesday morning, buoyed by industry data that showed an unexpected drop in U.S. crude inventories last week.

Price action

West Texas Intermediate crude for September delivery
CL00,
+1.15%

CL.1,
+1.15%

CLU23,
+1.15%
rose 76 cents, or 0.9%, to $86.38 a barrel on the New York Mercantile Exchange.
October Brent crude
BRN00,
+0.96%

BRNV23,
+0.96%,
the global benchmark, was up 64 cents, or 0.7%, at $86.81 a barrel on ICE Futures Europe.

Market drivers

The American Petroleum Institute, an industry trade group, said late Tuesday that U.S. crude inventories fell by 4.1 million barrels last week, according to a source citing the data, while gasoline and distillate inventories rose.

The Energy Information Administration will release official inventory data Wednesday morning. Analysts surveyed by S&P Global Commodity Insights, on average, forecast a 930,000 barrel drop in crude inventories last week. Gasoline stocks were forecast down 1.1 million barrels, with distillates unchanged.

The EIA last week reported that crude inventories dropped by more than 17 million barrels, a record, in the week ended July 28.

Oil stumbled early in Tuesday’s session, losing ground after China trade data showed a substantial slowdown in crude consumption in July, but futures bounced back to close higher after Saudi Arabia’s cabinet affirmed OPEC+ production measures, analysts said.

Tighter supply, driven in particular by voluntary cuts by Saudi Arabia and Russia, has been credited with lifting crude over the past six weeks, with Brent and WTI ending Tuesday near 2023 highs set in April.

“There is no doubt that there is plenty of momentum here, and traders are really ignoring all the bad news that is embedded in the Chinese data, which many analysts are trying to drum as loud as they can,” Naeem Aslam, chief investment officer at Zaye Capital Markets, said in a note.

“Oil traders are feeling highly comfortable with their approach when it comes to trading oil prices, and the clear trend seems to be skewed to the upside,” he wrote.