Oil prices have increased after crude inventories in the US rose by ten million barrels, which is less than expected. According to Reuters, West Texas Intermediate (WTI) futures were trading at $14.24 a barrel, a 27% gain over the first two days of this week.
Meanwhile, Brent crude LCOc1 futures rose by $0.93 to $21.39 a barrel at 0233 GMT. Data released by industry group American Petroleum Institute (API) has highlighted an increase in US crude stocks to 510 million barrels in the week that ended on 24 April.
Expectations that demand would increase as some of the European nations and the US cities moved to ease Covid-19 lockdowns, also supported oil prices.
National Australia Bank Melbourne commodity research head Lachlan Shaw was quoted by the news agency as saying: “It’s a little bit of good news that maybe storages aren’t filling quite as quickly in the US as you would have thought.”
Regulators in Texas, US are set to hold a vote on 5 May on whether to enact output cuts. Furthermore, North Dakota and Oklahoma officials are examining several ways to enable legal output cuts.
That would add to production cuts of 9.7 million bpd agreed by the OPEC+ Group, or about 10% of global production, which will take effect from next month.
Shaw further added: “The other thing coming through is more detail and a louder groundswell towards plans for removing COVID restrictions, particularly in Europe — in countries like Spain, France, Austria and Switzerland. That’s going to see demand pick up.”
