Oil Continues to Rise as U.S. Records Biggest Stockpile Draw This Year
Oil held gains after U.S. crude inventories fell by the most since December, signaling a near-term supply squeeze.
Brent traded near $74 a barrel, after rising 1.1% on Wednesday to close at its highest since late February, while West Texas Intermediate held steady below $70. U.S. inventories fell by 3.34 million barrels last week, falling to their lowest in a month, while gasoline inventories also fell, government data showed.
Oil has been on an upward trend since early March as sanctions and tariffs from the Trump administration raised the prospect of supply disruptions from producers including Iran and Venezuela. That prompted traders to buy bullish oil options to protect against a price spike. “There are several fundamental reasons for the recent rise in oil prices, but one cannot help but conclude that it is U.S. trade policy that will be the main determinant and guide the next $10 to $15 a barrel price move,” said Tamas Varga, an analyst at brokerage PVM. Major oil traders including Trafigura Group and Gunvor Group are pessimistic about crude prices for the rest of the year due to rising supply, especially from outside OPEC+. The producer group is also scheduled to start restarting idled output next month, the first of a series of planned increases.
Source: Bloomberg
