2023-08-09 16:59:12
Oil prices touched new peaks on Wednesday, with Brent crude hitting its highest price since January, following a large withdrawal of US fuel stocks helped offset fears of slowing demand from China.
Brent crude rose $1, or 1.2 percent, to $87.17 a barrel by 15:06 GMT, following it touched $87.65 earlier in the session, the highest price since January 27.
US West Texas Intermediate crude rose $1.13, or 1.4 percent, to $84.03 a barrel. Earlier today, US benchmark crude touched $84.65, the highest price since November 2022.
Government data showed that US gasoline stocks fell by 2.7 million barrels last week, and that distillate stocks, which include diesel and heating oil, fell by 1.7 million barrels last week, compared to analysts’ expectations in a Archyde.com poll that both stocks would mostly remain stable.
“We are seeing an increase in demand for gasoline. It raises concerns regarding the scarcity of gasoline inventories, which are still below average,” said Phil Flynn, an analyst at (Price Futures Group).
The decline in inventories helped allay some of the concerns stemming from Chinese data showing that crude oil imports in July fell 18.8 percent from the previous month, to their lowest daily rate since January.
Supporting prices was the announcement by Saudi Arabia, the world’s largest oil exporter, that it would extend a voluntary cut in oil production by one million barrels per day for another month, to include September.
Russia also said that in the same month it will reduce its oil exports by 300 thousand barrels per day.
Karalambos Pesoros, Chief Investment Analyst at XM. For the brokerage, “the latest recovery is mainly driven by the pledge of major producers, such as Saudi Arabia and Russia, to keep supplies low for another month.”
Crude oil achieved gains for the sixth consecutive week last week, supported by the decline in OPEC + supplies and hopes that the stimulus will enhance the recovery of oil demand in China.
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