Oil futures rose Wednesday, putting them on track to snap a four-day losing streak, after industry data showed a fall in U.S. crude inventories ahead of an official reading on supply levels from the Energy Department’s Energy Information Administration.
West Texas Intermediate crude for September delivery
the global benchmark, advanced 79 cents, or 1.1%, to $69.82 a barrel on ICE Futures Europe.
The American Petroleum Institute reported late Tuesday that U.S. crude supplies fell by 1.2 million barrels for the week ended Aug. 13, according to sources. The API report also reportedly showed an inventory decline of 1.2 million barrels for gasoline, while distillate supplies edged up by 502,000 barrels. Crude stocks at the Cushing, Okla., storage hub, meanwhile, fell by about 1.7 million barrels for the week, sources said.
Inventory data from the Energy Information Administration will be released Wednesday. On average, the EIA is expected to show crude inventories down by 3.1 million barrels, according to a survey of analysts conducted by S&P Global Platts. The survey also calls for a supply decline of 2.3 million barrels for gasoline, while distillate stocks are expected to rise by 700,000 barrels.
“Investors are worried that oil prices went too high during its rallying phase when optimism was sky-high about demand returning to normal. But now, investors are forced to reassess those rosy views and are realizing that demand is actually a little softer,” said Fawad Razaqzada, market analyst with ThinkMarkets, in a note.
He noted that oil inventories have missed expectations in recent weeks as a previous run of sharp inventory drawdowns came to a halt.
“If we see an unexpected build, then expect to see oil prices take a tumble. Beyond the short term impact of inventories data, the weakening signs of demand for oil, and the ongoing return of OPEC+ oil means the market is no longer going to be very tight,” the analyst said.