Brent oil rises above $60, buoyed by US inventory drawdown

SINGAPORE: Prices for Brent oil rose above $ 60 a barrel for the first time in over a week on Wednesday amid data that showed a larger-than-expected drawdown in US crude inventories, but ongoing worries about a global economic recession capped gains.

Brent crude had risen 13 cents, or 0.2 per cent, to $ 60.16 a barrel by 0136 GMT, after settling 0.5 per cent higher on Tuesday.

US crude was up 12 cents, or 0.2 per cent, at $ 56.25 a barrel.

US crude oil stocks fell by 3.5 million barrels to 439.8 million in the week to Aug. 16, data from industry group the American Petroleum Institute (API) showed on Tuesday. Analysts polled by Reuters had expected a decrease of 1.9 million barrels.

Inventory numbers from the government’s Energy Information Administration (EIA) are due at 10:30 a.m. EDT (1430 GMT) on Wednesday.

“US inventory data this week will again be a more critical catalyst than usual given that we are nearing the end of peak US driving season,” Stephen Innes, managing partner, VM Markets, said in a note.

Tensions in the Middle East remained in focus as US Secretary of State Mike Pompeo said on Tuesday that the country would take every action it can to prevent an Iranian tanker sailing in the Mediterranean from delivering oil to Syria in contravention of US sanctions.

Crude prices were also buoyed by official data showing lower exports in June from Saudi Arabia, the world’s top oil exporter.

Saudi Arabia plans to keep its crude oil exports below 7 million bpd in August and September despite strong demand from customers, to bring the market back to balance, a Saudi oil official told Reuters earlier this month.

But uncertainty over the global economic outlook amid the Sino-US trade war capped gains in oil prices.

“The trade-related tug of war in the oil market will probably extend until we get some semblance of clarity from the next round of US-China trade discussion,” Innes said.