Decrease in US stocks lifts oil

London/Singapore — Global benchmark Brent oil prices rose above $75 a barrel on Thursday as crude inventories in the world’s top oil consumer, the US, fell to their lowest since January 2020.

Brent gained 43c, or 0.6%, to trade at $75.17 by 9.30am GMT, while the US benchmark West Texas Intermediate (WTI) crude climbed 51c, or 0.7%, to $72.90.

In June, Brent topped $75 for the first time in more than two years but fell back in July on fears that the rapid spread of the coronavirus Delta variant could hurt demand and a deal reached by leading producers in Opec to boost supply.

“The [oil inventory] falls suggest the rise in cases of Covid-19’s Delta variant is having little impact on mobility,” ANZ analysts wrote in a note.

Crude inventories fell 4.1-million barrels in the week to July 23, the US Energy Information Administration (EIA) said, helped by lower imports and a decline in weekly output.

The US economic recovery is still on track despite the rise in infections, the Federal Reserve said on Wednesday, flagging ongoing talks around the eventual withdrawal of monetary policy support.

“While the risk to the demand outlook could increase due to governments across Europe reducing permission for public gatherings, we note that markets have already undergone several rounds of mobility restrictions … yet, the global recovery was not significantly derailed,” Citi analysts said in a note.

Further support for prices came from Iran's statement that blamed the US for a pause in nuclear talks, which could mean a delay in a return of Iranian barrels to the market. 

Reuters