Singapore — Oil prices rose on Thursday, recouping early losses, as crude stockpiles in the US, the world’s largest oil consumer, fell sharper than expected as refining output rose and exports surged.

Brent crude oil futures rose by 17c, or 0.3%, to $69.13 a barrel by 5.43am, and US West Texas Intermediate (WTI) crude futures gained by 8c, or 0.1%, to $65.71 a barrel.

Both benchmarks had hit their highest since mid-March on Wednesday before retreating.

“As the rollout of vaccines continues and a pent-up summer driving season continues to manifest, this trend should accelerate, keeping demand for motor fuels robust and boosting market confidence in the recovery story,” analysts from Citigroup said in a note.

US crude stocks fell more than expected last week as refining output rose and exports surged, the Energy Information Administration said on Wednesday.

Crude inventories fell by 8-million barrels in the week to April 30 to 485.1-million barrels, compared with expectations in a Reuters poll for a 2.3-million-barrel drop.

US petrol stocks rose by 737,000 barrels in the week, the EIA said, against a forecast for a 652,000-barrel draw.

“We say US demand is strong,” said analysts from Commonwealth Bank of Australia. “The US refinery utilisation rate is now above the five-year average.”

The Commonwealth Bank analysts said US jet fuel demand is expected to surge by 30% in the second quarter compared with the first quarter on increased domestic travel.

Pandemic-related restrictions in the US and parts of Europe are easing, but infections are still on the rise in major crude oil importers India and Japan, capping price gains.

Meanwhile, militants using bombs attacked two oil wells at an oilfield close to the northern Iraqi city of Kirkuk on Wednesday, killing at least one policeman and setting off fires, the country’s oil ministry said.

Industry sources said the attack had not affected output. An oil ministry statement did not comment on production.



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