Oil rose as signs of a further drawdown in US inventories helped prices to extend a rally driven by an unexpected OPEC+ supply cut.
(Bloomberg) — Oil rose as signs of a further drawdown in US inventories helped prices to extend a rally driven by an unexpected OPEC+ supply cut.
West Texas Intermediate rose toward $81 a barrel after closing at the highest level in almost 10 weeks. The industry-funded American Petroleum Institute reported nationwide crude stockpiles fell 4.3 million barrels, including a drop at the key storage hub in Cushing, Oklahoma, according to people familiar with the data. The breakdown also pointed to lower gasoline and distillate holdings.
Crude rallied by almost 7% in the first two days of the week after the Organization of Petroleum Exporting Countries and its allies including Russia blindsided the market with a surprise supply cut. The cartel’s move, which was aimed at investors betting against gains, reinvigorated the debate among leading banks about whether crude can rally back to $100 a barrel.
Oil has risen by more than a quarter since its lows in March, when a banking crisis harmed appetite for risk assets including oil. Before the lift from the OPEC+ cut, the upswing was underpinned by expectations for a rebound in Chinese demand after Covid Zero was abandoned. In addition, a weaker dollar has helped to boost the allure of commodities priced in the US currency.
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