On early Wednesday, oil prices rose by almost one per cent, extending overnight gains. It was led by industry data that exhibited U.S. crude stocks dipping more than expectations the previous week due to two gigantic hurricanes. Moreover, it indicated stiff supply amid burgeoning demand.
The US WTI (West Texas Intermediate) crude futures hiked to $71.24 by 75 cents or 1.1 per cent a barrel during 0131 GMT. It added a gain of 35 cents from Tuesday.
On the other side, the Brent crude futures surged to USD 75.04 a barrel, gaining 0.9 per cent or 68 cents. Interestingly, it had gained 44 cents on Tuesday.
The oil market is focusing on the current tight supply issue. Earlier this week, it had drifted to China Evergrande Group, a leading Chinese property developer. It gave jitters to the market over the possible default by the conglomerate.
The week ended on September 17 witnessed the U.S. crude stock slipping by 6.1 million barrels, as per the market sources. On Tuesday, it cited figures from the API ( American Petroleum Institute).
Notably, it was a way bigger reduction than the 2.4 million barrels declines in crude inventories.
For confirming the massive drop in fuel stocks and crude, the market is anticipating data from the U.S. Energy Information Administration.
It is noticeable that supply may continue to remain on the tighter side, as the biggest oil producer of the U.S. Gulf of Mexico, Royal Dutch Shell, would be cutting its supply until next year.
Meanwhile, distillate stocks plunged by 2.7 million barrels. It includes jet fuel. Moreover, in a big turnaround, the gasoline inventories slipped by 432,000 barrels. As per the sources, API data revealed the scintillating information.
Notably, the demand for jet fuel is already increasing, and the declining supply would push prices higher, and travel and transportation would become costlier.
As per ANZ commodity analysts, the ban by the U.S. on foreign travellers furthered the sentiments of markets.
Moreover, some OPEC+ nations are struggling to hike the production to their targeted levels. The countries that are bearing the brunt of the shortfall are Kazakhstan, Angola and Nigeria.