Oil rose on Wednesday after concerns about spike in shipments from Iran were offset by optimism about improving US fuel demand, backed by a decline in weekly inventory estimates.
July Brent crude oil futures rose 44 cents, or 0.6%, to $ 69.09 a barrel through 0710 GMT, while US West Texas Intermediate (WTI) crude oil was trading at $ 66.35 a barrel for July, which corresponds to an increase of 28 cents or 0.4%.
Both benchmarks were up on Tuesday and were at their highest levels in a week. They were hoping for higher demand during the summer driving season in the northern hemisphere and for the coronavirus curbs to be lifted. US crude oil and fuel inventories fell last week, two market sources said, citing Tuesday’s American Petroleum Institute figures.
Crude oil inventories declined 439,000 barrels for the week ending May 21. Gasoline inventories fell 2 million barrels and distillate inventories fell 5.1 million barrels, the data showed.
“However, oil prices are expected to stay near their current high levels as expectations of fuel demand rebound in the US and Europe, particularly with aviation fuel demand picking up later this year, add to concerns about the return of the Iranian supply will make up for it. ” he said.
Goldman Sachs predicts oil prices will climb to $ 80 a barrel in the fourth quarter, arguing that the market underestimated a recovery in demand despite a possible resumption of Iranian supply.