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Oil extended gains after an industry report showed a bigger-than-expected drop in American crude inventories and as Iran all but ruled out a meeting with the US.
Futures in New York climbed as much as 1.5% after a 2.4% jump Tuesday. The American Petroleum Institute said stockpiles fell by 11.1 million barrels last week, according to people familiar with the data. That would be the largest decline since June if confirmed by government figures due Wednesday. The API also reported a 2.8 million barrel draw in distillates and gasoline inventories.
Oil is still heading for only its second monthly drop this year amid rising trade and growth pessimism. The prospect of more tension in the Persian Gulf is keeping the geopolitical risk premium intact after Iranian President Hassan Rouhani responded to President Donald Trump’s suggestion of a meeting by saying the US must lift sanctions on the Islamic Republic first.
“The mammoth crude inventory draw has, at least for the time being, put to rest those US recessionary doom and gloom fears,” Stephen Innes, managing partner at VM Markets Pte in Singapore, said in a note. The decline in gasoline and distillate stockpiles is “especially comforting to investors as we are entering the last long weekend of the peak US driving season,” he said.
West Texas Intermediate crude for October delivery rose 69 cents, or 1.3%, to $55.62 a barrel on the New York Mercantile Exchange as of 7:44 am in London, after climbing as much as 80 cents earlier. The contract closed up $1.29 on Tuesday.
Brent for October settlement advanced 57 cents, or 1%, to $60.08 a barrel on the ICE Futures Europe Exchange. It settled 1.4% higher on Tuesday. The global benchmark crude traded at a $4.46 premium to WTI.
US crude inventories fell by 2.85 million barrels in the week through August 23, according to a Bloomberg survey of analysts. If the API figures are confirmed by Energy Administration data, it will be the second drop in a row following two weeks of gains that raised recessionary fears.
Brent for October settlement advanced 57 cents, or 1%, to $60.08 a barrel on the ICE Futures Europe Exchange. It settled 1.4% higher on Tuesday. The global benchmark crude traded at a $4.46 premium to WTI.
US crude inventories fell by 2.85 million barrels in the week through August 23, according to a Bloomberg survey of analysts. If the API figures are confirmed by Energy Administration data, it will be the second drop in a row following two weeks of gains that raised recessionary fears.
Brent for October settlement advanced 57 cents, or 1%, to $60.08 a barrel on the ICE Futures Europe Exchange. It settled 1.4% higher on Tuesday. The global benchmark crude traded at a $4.46 premium to WTI.
US crude inventories fell by 2.85 million barrels in the week through August 23, according to a Bloomberg survey of analysts. If the API figures are confirmed by Energy Administration data, it will be the second drop in a row following two weeks of gains that raised recessionary fears.
The Organization of Petroleum Exporting Countries and its allies said they expect a “significant” decrease in global crude inventories in the second half after they trimmed output more than planned. The Joint Ministerial Monitoring Committee, composed of key nations from the OPEC+ coalition, said the group’s implementation of cutbacks was 159% in July.
Iran’s reaction to meeting with the US highlights the challenges facing Trump after he signalled he could meet with Rouhani and perhaps ease restrictions. “We are interested in solving problems in a reasonable way, but we’re not interested in taking photos,” Rouhani said in a televised speech to officials in Tehran. “The key to changing the relationship is in Washington’s hands.”
