TOKYO (Reuters) – Oil prices advanced on Thursday as withdrawals from US crude oil inventories and production cuts by major producers eased concerns about oversupply, but continued concern over the global economic consequences of the Covid-19 pandemic held back gains.
Brent crude futures for July delivery were trading 33 cents higher, or 0.9 percent, to $ 36.08 a barrel by 0344 GMT, rising for a second day.
US West Texas Intermediate crude for delivery in July rose 20 cents, or 0.6 percent, to $ 33.69 a barrel, extending its gains for the sixth straight session.
The US Energy Information Administration data showed that crude inventories in the United States fell five million barrels last week, compared to expectations in a Reuters poll of an increase of 1.2 million barrels, while stocks in Cushing’s Oklahoma delivery center fell 5.6 million barrels.
Prices recently received support thanks to shipping data that showed the Organization of the Petroleum Exporting Countries (OPEC), Russia and other allies, in what is known as the OPEC + group, were complying with their pledge to cut 9.7 million barrels per day.
The OPEC Secretary General said that the organization itself is encouraged by the high prices and the strong commitment to production pledges, although sources said that the group does not rule out taking further steps to support the market.
Indeed, the current crude market is indicating a rapid shift from a massive supply surplus at the height of the public isolation measures linked to the Corona virus in April towards an expected supply shortage in the second half of the year.
But concerns about the lasting economic impact of the pandemic, particularly in the United States, the world’s largest oil consumer, are putting downward pressure on prices.
Moataz Mohamed prepared for the Arab publication