Oil prices jump on US inventory drop – Gulf Today

Oil prices jump on US inventory drop – Gulf Today

Oil prices jump on US inventory drop

3 hours ago

Picture used for illustrative purpose. File

Oil prices rose on Wednesday after a surprise drop in U.S. crude inventories, but demand concerns amid record increases in COVID-19 infections in some USstates capped gains.

Brent crude futures rose 59 cents, or 1.4%, to $43.81 a barrel by 1216 GMT. US West Texas Intermediate crude futures gained 47 cents, or 1.2%, to $41.51 a barrel.

Inventories of crude oil in the United States dropped by 6.8 million barrels last week to 531 million barrels, data from industry group the American Petroleum Institute showed on Tuesday.

Analysts' expectations in a Reuters poll were for an increase of 357,000 barrels. US government data is due later on Wednesday.

"A relief of 6.8 million barrels could normally help prices rise even further, but concerns over a new supply glut coming from August are capping gains," Rystad Energy's head of oil markets Bjornar Tonhaugen said.

The pandemic is keeping alive concerns about falling fuel demand causing an oversupplied market as record numbers of coronavirus infections are reported globally, including in the United States, the world's biggest consumer of oil. 

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