Crude oil futures are recording modest gains in the middle of the trading week, buoyed by a larger-than-expected withdrawal of US inventories. The bullish storage report could add fuel to the widespread optimism in the oil and gas sector, particularly as the global economic recovery accelerates and energy demand is renewed.
July West Texas Intermediate (WTI) crude oil futures rose $0.16, 0.23%, to $70.21 per barrel at 14:42 GMT on Wednesday on the New York Mercantile Exchange. US crude has had a monster year, rallying more than 45% in the first half of 2021.
Brent, the international benchmark for oil prices, is also posting gains midweek, looking to test $73. August Brent crude futures tacked on $0.29, or 0.4%, to $72.51 a barrel on London’s ICE Futures exchange. Brent prices are up 40% year-to-date.
According to the US Energy Information Administration (EIA), domestic crude inventories plummeted 5.241 million barrels in the week ending June 4. The market had penciled in a decline of only 2.036 million barrels. This is also a greater withdrawal than the 5.08 million barrels in the previous week.
Oil supplies at the Cushing, Oklahoma storage facility increased 165,000 barrels. Gasoline supplies advanced 7.046 million barrels, while distillate stocks surged 4.412 million barrels.
The bullish storage report is adding to the broader optimism in the crude market, with demand forecast to soar amid the rebound in international travel and the annual summer driving season. As long as the global economy continues to recovery, industry observers say that oil prices could soon test $80 a barrel.
The potential hurdle? The Organization of the Petroleum Exporting Countries (OPEC) and its allies, OPEC+, that are likely to increase output. The cartel possesses more than six million barrels per day of spare capacity that will more than likely flood the market as prices test their highest levels in about three years.
That said, investors will be looking to $100 oil again this summer.
In other industry news, Saudi Aramco is reportedly beginning to market it first dollar-denominated bonds to investors as the company attempts to raise money to cover its enormous $75 billion dividend.
In other energy commodities, July natural gas futures picked up $0.026, or 0.83%, to $3.154 per million British thermal units (btu). July gasoline futures added $0.011, or 0.5%, to $2.23 per gallon. July heating oil futures rose $0.0093, or 0.44%, to $2.1443 a gallon.