Oil rises on manufacturing data, U.S. inventories

Andrew Cummings
July 2, 2020

Oil prices rose more than 1% on Wednesday following a drawdown in us crude inventories from record highs and a string of positive manufacturing data, but a surge in coronavirus cases tempered gains. By 0201 GMT they were trading down 26 cents, or 0.7%, at $39.44 a barrel, having jumped 3% on Monday. Gasoline inventory rose 1.2 million barrels, compared to a draw of 1.7 million barrels a week ago.

Brent crude was up 13 cents, or 0.3%, at $41.40 a barrel at 1236 GMT, and US crude was up 14 cents, or 0.4%, at $39.41 a barrel.

Sentiment was also boosted by improving economic data around the world.

"The market continues to fret about the recovery in demand as authorities reviewed reopening strategies", ANZ analysts said, referring to the three most populous USA states - Texas, Florida and California. In China, the manufacturing purchasing managers' index (PMI) showed factories slowly gathered steam in June after the government eased lockdowns.

Commercial crude oil inventories in the United States decreased by 7.2 million barrels in the week ending June 26th, the Energy Information Administration (EIA) announced on Wednesday.

Private payrolls processor ADP said the US private sector added 2.369 million jobs last month.

The Organization of the Petroleum Exporting Countries and allies, known as OPEC+, under a new agreement have been cutting output since May by a record 9.7 million barrels per day (bpd) to support prices and demand hit by the pandemic.

Top oil exporter Saudi Arabia may raise its August official selling price (OSP) for crude sold in Asia, hiking for a third straight month due to rising Middle East benchmarks and a rebound in Asian refining margins, industry sources said.

OPEC produced an average of 22.62 million barrels per day (bpd) in June, a Reuters' survey found, down 1.92 million bpd from May's revised figure.

As a result of these, there were many oil futures contracts outstanding to have oil delivered several months to the future date a rare market condition that has calmed oil traders 'anxiety after April's chaos.

Other reports by iNewsToday