Oil Gains 3% in Recovery Ahead of U.S. Inventory Data

© Reuters.

By Barani Krishnan

AiVIF.com - Oil prices snapped a six-day losing streak as market participants took Covid worries and their potential impact on demand off their minds ahead of U.S. inventory data that is likely to show a weekly drawdown in stockpiles of crude, gasoline and diesel.

New York-traded U.S. West Texas Intermediate crude, the benchmark for U.S. oil, settled Tuesday’s trade up $1.81, or 2.7%, at $68.29 per barrel. WTI lost more than 9% over six previous sessions.

London-traded Brent, the global benchmark for oil, rose $1.71, or 2.5%, to $70.75 by 2:45 PM ET (1845 GMT). Brent lost 7.7% last week, its biggest weekly decline in nine months.

“Crude prices are rebounding as the rout that stemmed from (the) Delta variant concerns has run its course,” said Ed Moya, analyst at New York’s OANDA. “The oil market is still heavily in deficit and after a … pullback, energy traders need to pounce on this buying opportunity.”

Crude prices also rose ahead of a weekly snapshot on inventory due from the API, or American Petroleum Institute.

API will issue at 4:30 PM ET (20:30 GMT) its log on U.S. crude, gasoline and distillate stockpiles for the week ended Aug 6. The figures serve as a precursor to the official weekly inventory data due on Wednesday from the U.S. Energy Information Administration.

Analysts tracked by AiVIF.com have forecast that crude inventories fell by 1.27 million barrels last week, compared with the previous week’s build of 3.63 million.

Gasoline inventories likely slid by 1.66 million barrels, after the drawdown of 5.3 million in the week to July 30, forecasts showed.

Stockpiles of distillates, which include diesel and heating oil, is expected to have declined by 472,000 barrels after a rise of 833,000 the week before.