HOUSTON: Oil prices rose about 1.5% after hitting a six-month low on Wednesday (Aug 17), as a steeper-than-expected drawdown in US crude stocks outweighed concerns over rising Russian output and exports as well as recession fears.
US crude stocks fell by 7.1 million barrels in the week to Aug 12 to 425 million barrels, Energy Information Administration (EIA) data showed, compared with analysts’ forecasts for a 275,000-barrel drop in a Reuters poll.
Brent crude settled US$1.31, or 1.42% higher at US$93.65 (RM418.42) per barrel. Earlier in the day, recession worries had pushed the benchmark price to its lowest since February at US$91.51. US West Texas Intermediate (WTI) crude rose US$1.58, or 1.8%, to US$88.11 (RM393.67) per barrel.
US crude exports hit 5 million barrels per day, the highest on record, EIA data showed, as WTI has traded at a steep discount to Brent, making purchases of US crude more attractive to foreign buyers.
In a sign of strong demand, petrol stocks drew 4.6 million barrels, much higher than the expected 1.1 million barrel draw.
“It was expected to be a friendly report and it was pretty much across the board. Some of those demand destruction concerns that the market was going through seem to be alleviated a little bit,” said Phil Flynn, an analyst at Price Futures group.
The American Petroleum Institute had on Tuesday flagged a 448,000 barrel draw in crude stocks and 4.5 million barrels in petrol inventories, according to sources.
On the oil supply front, the market is awaiting developments from talks to revive Iran's 2015 nuclear deal with world powers, which could eventually lead to a boost in Iranian oil exports.
The European Union and United States said on Tuesday they were studying Iran’s response to what the EU has called its “final” proposal to save the deal.
Analysts at Goldman Sachs said a return of Iranian crude supply would reduce their 2023 forecast by US$5-US10 per barrel from US$125 per barrel. – Reuters