Oil edges higher over estimated decline in US crude stocks

ANKARA

Oil prices climbed Wednesday on the back of an estimated decline in US crude stocks, indicating that demand is rebounding in the country.

International benchmark Brent crude was trading at $85.33 per barrel at 0639 GMT for a 0.64% increase after closing the previous session at $84.78 a barrel.

American benchmark West Texas Intermediate (WTI) was at $84.47 per barrel at the same time for a 0.38% increase after the previous closed at $84.15 a barrel.

Late Tuesday, the American Petroleum Institute (API) announced its estimate of a fall of 2.5 million barrels in US gasoline inventories, exceeding the market expectation of a rise of 1.9 million barrels.

The forecast of such a large inventory draw signals a recovery in crude demand in the US, easing investor concerns over dwindling demand, which, in turn, supports higher prices.

The US Energy Information Administration (EIA) will release official oil stock data later on Wednesday. Oil prices are due to continue rising if the EIA signals a drop in stocks.

Prices have been positively impacted over expectations that US President Joe Biden could delay his plans to phase-out fossil fuels and release crude from the country’s strategic reserves after the country’s Energy Secretary Jennifer Granholm on Monday said the move may be announced “as soon as this week”.

“President Biden or his senior assistants often talk about releasing oil from the SPR [Strategic Petroleum Reserves]. As we all know, Strategic Petroleum Reserves are not meant or designed for commercial purposes. They are built for emergencies. I am surprised how Mr. Biden with that rich political background should talk about withdrawal from SPR. This leads to panic buying in the market,” Fereydoun Barkeshli, chairman of the Vienna Energy Research Group (VERG), told Anadolu Agency on Tuesday.