Oil Up as U.S. Inventories Fall

By Zhang Mengying

Investing.com – Oil was up on Thursday morning in Asia, supported by lower crude inventories and a rebound in gasoline demand in the U.S.

Brent oil futures rose 0.90% to $102.58 by 12:41 AM ET (4:42 AM GMT) and crude oil WTI futures jumped 1.04% to $98.27.

“Risk sentiment has recovered from recession fears due to the ongoing U.S. earnings optimism and a less aggressive Fed’s rhetoric on rate hikes, which supported a rally in the crude market,” CMC Markets analyst Tina Teng told Reuters, adding that a weakened U.S. dollar has also lifted commodities prices.

The U.S. Federal Reserve raised interest rates by 75 basis points to 2.25-2.5% as markets expected.

Wednesday’s U.S. crude supply data from the U.S. Energy Information Administration showed a drop of 4.523 million barrels for the week ended July 22.

“The U.S. consolidated its position as the world’s largest petroleum exporter,” Citi analysts said in a note, as the combined gross exports of crude oil and refined products at a record 10.9 million barrels per day.

Crude supply data from the American Petroleum Institute released the day before, showed a draw of 4.037 million barrels.

The Group of Seven richest economies intends to pose a price cap on Russian oil exports by December 5, 2022.

In the meantime, Russia has cut gas supply via Nord Stream 1 - its main gas link to Europe - to just 20% of capacity, which could lead to switching to crude from gas and prop up prices for oil in the short term, analysts said.