By Bloomberg|Julia Fanzeres and Jordan Fitzgerald | Oil rose, clawing back from a run of losses, after a government report showed that US crude inventories fell to the lowest since February.
West Texas Intermediate topped $77 a barrel after falling 5.5% since last Wednesday. US oil inventories shrank by 3.74 million barrels last week, the Energy Information Administration said. That was the fourth straight decline. Price gains were limited as traders also eyed declines in equity markets.
Crude’s earlier selloff was exacerbated by trend-following algorithms after futures surpasses key technical levels. On Tuesday, WTI settled into oversold territory on the 9-day relative strength index, signaling a rebound was imminent.
Meanwhile, US gasoline inventories dropped the most since March, as some refineries remain shuttered and summer driving season propelled seasonal fuel demand on a four-week basis to the highest level since 2021. Though driving season typically peaks in late July, there may still be some room left to rally.
“It’s still summer driving season,” said Rob Thummel, a portfolio manager at Tortoise Capital Advisors. “There’s still vacation. There could still be some good demand numbers over the next several weeks.”
Oil’s recent bout of weakness has come amid concerns about softer demand in China, the world’s biggest crude importer, with technical traders compounding the downward pressure. Still, futures remain higher year-to-date as OPEC+ presses on with output curbs. A Bloomberg tally of Russian flows shows exports dropping to the lowest since December.
Russia also plans to make extra crude output cuts in October and November — and also between March and September of next year — to compensate for overproduction earlier this year, the Energy Ministry said Wednesday.
Elsewhere on the supply side, wildfires across Canada’s oil patch threatened almost 10% of the region’s oil production. 170 blazes were burning in Alberta alone, with over 50 out of control.
Oil Rises.
Here are Wednesday’s closing energy prices:
- West Texas Intermediate September contract: $77.59 per barrel, up 63 cents, or 0.82%. Year to date, U.S. crude oil has gained 8.3%.
- Brent September contract: $81.71 per barrel, up 70 cents, or 0.86%. Year to date, the global benchmark is ahead 6%.
- RBOB Gasoline August contract: $2.45 per gallon, up 3 cents, or 1.55%. Year to date, gasoline is up 16.6%.
- Natural Gas August contract: $2.11 per thousand cubic feet, down 7 cents, or 3.2%. Year to date, gas is down 15.8%.
