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Oil prices climb after API data shows surprise drop in US stocks

Brent crude futures rose 41 cents, or 0.5%, to $91.19 a barrel by 0422 GMT, while U.S. West Texas Intermediate crude was at $89.74 a barrel, up 38 cents, or 0.4%

Topics
US stock market | oil prices rise | Crude Oil Price

Reuters  |  Singapore 

oil, crude
File Photo

By Florence Tan

SINGAPORE (Reuters) - Oil prices climbed on Wednesday after two sessions of losses as industry data showed an unexpected drop in U.S. crude and fuel stocks, offsetting concerns of a possible rise in supplies from .

Brent crude futures rose 41 cents, or 0.5%, to $91.19 a barrel by 0422 GMT, while U.S. West Texas Intermediate crude was at $89.74 a barrel, up 38 cents, or 0.4%.

"Undersupply is the key factor that has pumped up the oil price," said Tina Teng, an analyst at CMC .

U.S. crude, gasoline and distillate stocks fell last week, according to market sources citing American Petroleum Institute figures on Tuesday. Crude inventories fell 2 million barrels, according to API, versus analysts' expectations of a 400,000-barrel increase.

More data from the U.S. EIA will be available at 10:30 a.m. EST (1530 GMT).

Still, concerns about a possible nuclear deal that could unleash more oil into global weighed on prices.

Brent and WTI slid about 2% on Tuesday, down for a second straight session, as Washington resumed indirect talks with to revive a nuclear deal. Such a deal could lift U.S. sanctions on Iranian oil and quickly add supplies to the market, although a number of vital issues still need to be ironed out.

"With the negotiations ongoing, the oil price is likely to lose steam in the next week, despite the bump higher we've seen today," Teng said, adding that there has also been some profit taking among investors who have turned cautious after prices hit more than 7-year highs.

Oil prices at near $100 a barrel could also draw more production from the . The Energy Information Administration expects U.S. crude output to rise 770,000 barrels per day to 11.97 million bpd in 2022.

Meanwhile, governments from the to Japan are looking at ways to tackle high oil prices as inflation soars.

In Europe, concerns over Ukraine eased as French President Emmanuel Macron said he believed steps could be taken to de-escalate the crisis after a meeting with Russian President Vladimir Putin and called on all sides to stay calm.

 

(Reporting by Florence Tan; editing by Richard Pullin and Gerry Doyle)

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

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First Published: Wed, February 09 2022. 14:43 IST
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