Oil prices increase as US refining surges led to lower inventories
Date
7/11/2024 5:44:13 AM
(MENAFN) Oil prices experienced a rebound on Wednesday following a notable increase in U.S. refining activity, which resulted in larger-than-expected declines in gasoline and crude oil inventories. brent crude futures rose by 66 cents, or 0.78 percent, reaching USD85.32 per barrel by 15:19 GMT, recovering from a 1.3 percent drop in the previous session. Similarly, U.S. West Texas Intermediate crude climbed 86 cents, or 1.06 percent, to USD82.27 per barrel, reversing losses observed in the prior session.
According to the U.S. energy Information Administration (EIA), crude oil inventories in the United States fell sharply by 3.4 million barrels to 445.1 million barrels during the week ending July 5. This decline significantly surpassed analysts' expectations, who had anticipated a drawdown of only 1.3 million barrels. Gasoline stocks also saw a substantial reduction, decreasing by 2 million barrels to 229.7 million barrels, well below the expected decline of 600,000 barrels.
In its monthly report released on Wednesday, OPEC maintained its projections for global oil demand growth, forecasting an increase of 2.25 million barrels per day in 2024 and 1.85 million barrels per day in 2025. This stability in demand forecasts comes amid recent fluctuations in oil prices driven by market reactions to weather-related disruptions in the U.S. state of Texas caused by Hurricane Beryl.
Following the hurricane's impact, which initially dampened production and transportation capabilities, the energy sector in Texas showed resilience. Oil and gas companies began resuming operations on Tuesday as ports reopened and most facilities returned to normal production levels. While some facilities sustained damage and power restoration remained incomplete, the overall recovery efforts contributed to alleviating concerns about prolonged disruptions in oil supply.
The rebound in oil prices underscores market optimism driven by improved refining activities and the stronger-than-expected drawdown in inventories, signaling potential stability in oil markets amid ongoing global demand dynamics and supply-side resilience in key production regions.
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