Oil futures: Brent up 4.2%, WTI 4.7% as most US product stocks fall
Quantum Commodity Intelligence – Crude oil futures rose more than 4% in trade on Wednesday afternoon amid a softening dollar index and as the EIA announced a fall in US product stocks amid a slight decline in utilization rates at refineries.
The front-month September Brent future was trading at $72.25/barrel (1655 GMT), compared to Tuesday’s settle of $69.35/b, a rise of 4.2%.
At the same time, September WTI was trading at $70.38/b, up from Tuesday’s settle of $67.20/b - a rise of 4.7%.
The dollar index softened in the morning as crude continues to recover from Thursday's brutal sell-off where front-month Brent hit a near eight-week low.
But after the EIA posted a big draw in road transport fuel that consisted of 2.1 million barrels for diesel and 100,000 barrels for gasoline, prices rose to their intraday high of $72.27/b before retreating slightly.
The slight draw in gasoline compares with an expected build.
Futures had initially fallen sharply on news of a 2.1 million-barrel build in crude stocks with the market expecting a much smaller build.
The figures now leave crude inventories at a one-year high.
But it was the expectation that gasoline stocks would have built more sharply that injected some bullish sentiment into the market.
Oil tanked $5/b on Monday, hit by a cocktail of lower expectations for nearby demand due to rising infections of Covid-19 and the expectation of a rise in supply over the medium term after OPEC+ agreed to increase production 2 million bpd by the end of the year.