Crude oil prices climbed higher on Wednesday, buoyed by data showing a notable drop in gasoline inventories in the U.S. last week, and on optimism about increased demand for oil from China.
Investors cheered prospects of increased demand from China as Beijing and Shanghai gradually open up following almost two months of COVID-related lockdowns.
West Texas Intermediate Crude oil futures for July ended higher by $2.70 or about 2.3% at $122.11 a barrel, hitting a 3-week high.
Brent crude oil futures moved up $2.77 or about 2.3% to $123.34 a barrel today.
Data from Energy Information Administration (EIA) showed crude in the Strategic Petroleum Reserve fell as refiners’ inputs rose to their highest level since January 2020. The EIA data said U.S. gasoline stocks dropped by 0.812 million barrels last week, as against expectations for an increase of about 1.1 million barrels.
The EIA data said crude inventories increased by 2.03 million barrels last week, against expectations for 1.92 million drop. Distillate stockpiles rose by 2.59 million barrels, more than twice the expected increase.
Meanwhile, reports suggest several countries might find it tough to boost output. In Norway, oil workers are reportedly planning to strike from Sunday over pay. This could result in significant drop in output.
UAE energy minister Suhai al-Mazrouei has said that effors by OPEC and allies to boost output are “not encouraging” with the group currently short of its target by about 2.6 million barrels per day.
A warning by the International Energy Agency that Europe could face energy shortages next year due to the sanctions imposed on Russia.
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