05 May 2021
Oil prices increased on Wednesday, following on from previous session gains as data showed U.S. crude stocks fell far more than forecast last week, boosting the upbeat stance on fuel demand.
U.S. West Texas Intermediate crude futures increased 48 cents, or 0.7%, to $66.17 a barrel, Reuters reports, after reaching $66.58.
In addition, Brent crude futures rose 49 cents, or 0.7%, at $69.37 barrel after hitting a seven-week high of $69.78 earlier in the session.
Both contracts increased close to 2% on Tuesday ahead of American Petroleum Institute (API) data.
"Crude oil prices appear to be supported by a large draw in crude and gasoline inventories, according to API figures," said Margaret Yang, Singapore-based DailyFX strategist.
"The energy demand outlook is brightened by eased lockdown measures in parts of the U.S. and UK, which helped to offset concerns over lower demand from India and Japan. The upcoming summer driving season may further boost fuel demand and support oil prices."
According to API data, crude stocks declined by 7.7 million barrels in the week to 30 April, more than three times the figure forecast by analysts surveyed by Reuters.
The U.S. Energy Information Administration (EIA) is publishing data later on Wednesday.
"If confirmed by the EIA, that would mark the largest weekly fall in the official data since late January," said Commonwealth Bank analyst Vivek Dhar.
The increase in oil prices has been bolstered by the Covid vaccine rollouts in the U.S. and Europe and lockdown restrictions beginning to ease.
Up to now, this has offset falling fuel demand in India. "However, if we were to eventually see a national lockdown imposed, this would likely hit sentiment," according to ING Economics analysts.