Oil prices rose on Wednesday after data showed that crude and fuel inventories in the United States went down more than expected last week, with Brent crude up by 52 cents or 0.8 per cent to $64.92 a barrel, and the US West Texas Intermediate (WTI) crude up by 33 cents or 0.6 per cent to $60.48 per barrel.
Crude oil inventories in the US decreased by 6.9 million barrels during the week ending October 24, after losing 1 million barrels in the week prior, according to data from the US Energy Information Administration (EIA) released on Wednesday.
The increase brings commercial stockpiles down to 416 million barrels according to government data, which is 6 per cent below the five-year average for this time of year.
The EIA’s data release followed figures from the American Petroleum Institute (API) which suggested that crude oil inventories saw a sharp decline in inventory of 4 million barrels.
For total motor gasoline (petrol), the EIA reported that inventories had contracted by 5.9 million barrels, after the week prior’s 2.1 million barrels decrease. The most recent figures showed average daily gasoline production decreasing slightly to 9.6 million barrels.
For middle distillates, inventories decreased by another 3.4 million barrels, with production decreasing by 134,000 barrels daily to an average of 4.5 million barrels daily.
Distillate inventories drew down by 1.5 million barrels in the week prior and are now 8 per cent below the five-year average for this time of year.
Also supporting prices, President Donald Trump’s optimistic tone over upcoming talks with his Chinese counterpart helped ease economic jitters.
Mr Trump has launched the US’ most aggressive rare-earth and critical-minerals expansion in more than a decade, signing over $10 billion in supply-chain deals across Australia, Japan, Malaysia, and Thailand in less than a week.
His Asian tour is expected to culminate on Thursday in a meeting with the Chinese leader in South Korea.
The optimistic note about US-China talks could help ease some concerns of a slump in economic activity from Trump’s tariffs and trade wars, which have raised concerns around oil demand and weighed on commodity prices in recent months.
The US Federal Reserve on Wednesday cut interest rates by 25 basis points as expected. However, the Chairman of the US central bank, Mr Jerome Powell’s comments after the meeting struck a note of caution on what lies ahead.
The Organisation of the Petroleum Exporting Countries and allies (OPEC+) is increasing leaning toward another modest output boost in December. The group started reversing cuts made to support the market in April.