Oil Prices Rise On Inventory Drawdown

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Oil Prices Rise On Inventory Drawdown

Oil Prices Rise On A Major Us Inventories Drawdown

Oil prices are inching higher during Wednesday's Asian session and are now sitting comfortably at a 2-month high. The recent upside in the oil prices comes after a report showed a massive drawdown in the US crude oil inventories.

The recent drawdown in the US oil inventories has increased optimism about increased demand from the US economy.

Although the oil prices are largely bullish, a little bit of selling was seen on Tuesday, mainly due to profit-taking. Additionally, Hurricane Beryl raised some fears of supply disruptions, which led to a little bit of selling in crude oil.

Wti Futures Trade At $82.07

The Brent oil futures contract for September is trading near $86.41 with a +0.2% change, while the WTI futures (September) are trading near $82.07 with a +0.2% change.

The recent weakness in the USD is also lending support to the oil prices after the Fed Powell's comments on inflation.

According to API, the drawdown in the US inventories was near 9.2 million barrels, a lot more than the forecasts made by the industry experts.

According to experts, this is a sign that the US demand has picked up in the last week which also supports the notion of higher oil prices.

Additionally, the American Automobile Association has also issued a forecast that road travel will reach record levels this week due to the holidays. Based on this, it is simple math - More cars on the road means more oil consumption which will lead to higher oil prices.

Up ahead, investors will be eyeing the comments from Fed officials as well as the labor market data to gauge demand and economic progress.

If any of the Fed officials hint at possible rate cuts, it will provide a further boost to the oil prices and could send them toward new yearly highs. For now, the oil prices remain supported with eyes set on the next resistance levels.

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