Oil Gains Ground as U.S. Supply Diminishes and Demand Hits Record Highs – .

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Oil climbs as US supplies dwindle and demand hits record highs – .


Oil rose after a report from the U.S. government showed rapidly declining inventories and record fuel demand in the midst of peak summer driving season.
Futures contracts rose 1% in New York on Thursday. Domestic supplies of crude and gasoline fell last week and a fuel demand gauge jumped to 10 million barrels per day in the week leading up to the July 4 holiday, according to the Energy Information Administration.

“Obviously in the United States we are seeing a strong recovery in demand,” said Quinn Kiley, portfolio manager at Tortoise, a company that markets around US $ 8 billion in energy-related assets. . “It’s a bullish setup. “

Oil prices rose 11% last month before volatile trading this week following the OPEC + standoff. Global supply has tightened amid a strong recovery in economies such as the United States and China, which has led the alliance to increase supply in the coming months.

In the United States, crude supplies fell nearly 7 million barrels last week and gasoline inventories fell the most since March, according to the EIA report. The country’s crude production has remained “lackluster” despite improving prices, suggesting that the crude curve will remain out of step, according to a new research report from Goldman Sachs Group Inc.

“The market did what it needed to do,” said Andrew Lebow, senior partner at Commodity Research Group. “He rallied around the bullish news. “

At the same time, OPEC + members are also stuck on how to increase supply in August and subsequent months. The UAE blocked the deal in an attempt to increase its production quota. The current stalemate has limited the rally in crude for now, Kiley said.

“This is still the primary concern in the larger markets,” he said.

Prices:

  • West Texas Intermediate crude for August delivery rose 74 cents to US $ 72.94 per barrel in New York
  • Brent for September settlement added 69 cents to close the session at US $ 74.12 a barrel

Meanwhile, there are concerns about the spread of the delta variant as well. The World Health Organization has called for caution about the pace of reopening around the world, with many regions seeing infections spread. Countries like Japan, Indonesia and Thailand have renewed mobility restrictions to curb the spread.

“The market realizes that the delta variant and other worrisome variants could very well slow the rate of demand recovery, even in the United States,” said Bart Melek, chief commodities strategy at TD Securities .

Associated coverage:

  • Royal Dutch Shell Plc has sold its stake in German refinery PCK Schwedt to private energy company Liwathon Group, adding to its growing list of asset sales this year.
  • The world’s largest oil company, Saudi Aramco, plans to raise tens of billions of dollars by selling more stakes in its operations.
  • European skies may be filling with planes again, but the oil refiners who make jet fuel for them are not seeing the same recovery.



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