Oil Prices Surge to Highest Since April Amid Declining U.S. Inventories

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July 4 (Reuters) – Brent crude oil prices reached their highest levels since April on Thursday, maintaining above $87 a barrel after U.S. inventory data revealed a significant drawdown. Brent crude futures rose by 21 cents to $87.55 per barrel, while U.S. West Texas Intermediate (WTI) increased by 18 cents to $84.06.

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In the previous session, Brent gained 1.3% to settle at $87.34, its highest close since April 30, while WTI settled at an 11-week high of $83.88. These gains followed a larger-than-expected 12.2 million barrel decline in U.S. crude stocks, reported by the Energy Information Administration (EIA). Analysts had anticipated a draw of just 680,000 barrels.

Traders also monitored geopolitical events and economic data, including the war in Gaza and elections in France and the United Kingdom. RBN Energy analyst Martin King noted that the market was quiet, with attention focused on the physical market and geopolitical developments.

Earlier, oil prices had dropped by as much as 83 cents, but the dip was expected not to last due to dollar weakness and a brighter outlook for U.S. fuel demand after the EIA data, according to PVM analyst Tamas Varga.

However, German industrial orders fell unexpectedly in May, adding to signs that a recovery for Europe’s largest economy remains elusive. Demand concerns were also heightened by U.S. data showing an increase in first-time applications for unemployment benefits and rising jobless numbers.

Countering these concerns, weaker economic data could hasten interest rate cuts by the U.S. Federal Reserve, which could support oil markets. On Thursday, Reuters reported that Russia’s oil producers Rosneft and Lukoil will sharply cut oil exports from the Black Sea port of Novorossiisk in July.

Meanwhile, Saudi Arabia’s Saudi Aramco cut the price for its flagship Arab light crude sold to Asia in August to $1.80 a barrel above the Oman/Dubai average. The potential price reduction for Asia underscores the pressure faced by OPEC producers as non-OPEC supply continues to grow amid global economic headwinds.

Swiss bank UBS expects Brent crude to reach $90 a barrel this quarter, citing OPEC+ production cuts and projected declines in oil inventories.

Gbenga Samson
Gbenga Samsonhttp://ThisDayLive.com
Samson Gbenga Salau [Editorial Board Adviser] Gbenga Samuel Salau is a professional journalist with over 17 years experience in journalism, he is a graduate of Communication and Language Arts, University of Ibadan. On completion of his youth service, he joined The Guardian as a freelance journalist and was later absorbed as a staff. While in the University, he was a campus journalist reporting for the Independence Hall and Faculty of Arts Press Clubs. As a campus journalist, he won the following awards; Independence Hall Press Best News writer; University of Ibadan Union of Campus Journalists’ Best News Reporter/Writer; First Runner-up, Reuben Abati Award for Investigative Journalism; Association of Faculty of Arts Students’ Press Best Reporter; University of Ibadan Union of Campus Journalists’ Best Political Writer; Winner, Reuben Abati Award for Investigative Journalism, and University of Ibadan Union of Campus Journalists’ Best Interviewer. He served the Association of Communication and Language Arts Students, as the Public Relation Officer, the same year he was appointed the News Editor of the Association of Faculty of Arts Students Press. The following session, he was made the General Editor, and a member of the 13-man University of Ibadan Students’ Union Transition Committee. As a reporter in The Guardian, in 2014, he won the Promasidor Quill Award Best Report on Nutrition and DAME Business Reporting category. In the 2015 edition of the Promasidor Quill Award, he won the best Report on Nutrition and Brand Advocate Categories, while in 2016, he won the NMMA Print Journalist of the Year, first runner-up Golden Pen Reporter of the Year and SERAs CSR Awards. Gbenga Salau loves traveling, reading, and listening to songs with good lyrics no matter the genre.

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