TOKYO (Reuters) – Oil prices rose more than 1% on Wednesday, with U.S. crude rising for a seventh day, after industry data showed a larger-than-expected inventory decline and investors turned shake off the worsening pandemic developments.
US West Texas Intermediate (WTI) was up 67 cents, or 1.3%, to $ 53.88 a barrel at 0420 GMT, after gaining nearly 2% on Tuesday. Brent crude oil was up 79 cents, or 1.4%, to $ 57.37, after rising 1.7% in the previous session.
Both benchmarks have been trading at their highest since February, before the coronavirus outbreak in China began to spread around the world and billions of people went into lockdown to prevent a pandemic that is now in a deadly second wave.
Prices are shaking off the latest developments in Europe and the United States, where the death toll and new infections continue to rise, with the focus on vaccine introduction, however fragmented.
Though China is grappling with the biggest coronavirus spike in months, he comments from President Xi Jinping gives a positive assessment of the second largest economy in the world and the largest oil importer supported prices.
“Oil prices also continued to rise … on economic optimism in China after President Xi’s comments and a report on stocks from API showed crude oil inventories fell more than expected, ”said Avtar Sandu, senior commodities manager at Phillip Futures.
U.S. oil inventories fell by 5.8 million barrels last week to around 484.5 million barrels, data from the American Petroleum Institute showed up late Tuesday. [API/S]
This was more than analysts’ expectations in a Reuters poll for a drop of 2.3 million barrels.
However, declining inventories and rising oil prices are likely to cause US drillers to get back into the fray, especially as Saudi Arabia and other major producers have cut their production, effectively ceding market share to American producers. , the analyst said.
Reporting by Aaron Sheldrick; Editing by Richard Pullin and Christopher Cushing