By Adedapo Adesanya
Oil prices soared on Wednesday, rebounding from losses early in the session, helped by encouraging figures like improved fuel demand from the United States and a weak Dollar.
Brent crude futures settled up by $1.09, or 1.1 per cent to $97.40 a barrel, while the US West Texas Intermediate crude futures gained $1.43 or 1.6 per cent to $91.93 per barrel.
Prices dropped when the EIA reported that crude inventory in the world’s largest producer saw a small jump of 5.5 million barrels in the week to August 5.
A week earlier, inventories added 4.5 million barrels, according to the EIA, which added to downward pressure on prices.
There were, however, positives as fuel inventories fell by 5 million barrels in the week to August 5, compared with a modest increase of 200,000 barrels for the previous week.
Fuel production increased, averaging 10.2 million barrels daily last week, compared with 9.3 million barrels daily a week earlier.
A booster also came as US consumer prices were unchanged in July and the US Dollar fell more than 1 per cent against a basket of currencies.
With most worldwide oil sales transacted in dollars, a weakening greenback is supportive of oil.
Analysts noted that crude’s gains were modest on Wednesday because there is not a lot of bullish strength in the market even with the Dollar news.
Flows on the Russia-to-Europe Druzhba pipeline resumed as the Russian government-owned oil pipeline Transneft restarted oil flows via the southern leg of the Druzhba oil pipeline.
Ukraine had suspended Russian oil pipeline flows to parts of central Europe since early this month because Western sanctions prevented it from receiving transit fees from Moscow, Transneft said on Tuesday.
An EU embargo on the import of Russian coal goes into effect on August 11 as part of the fifth package of EU sanctions to punish the Russian economy since President Vladimir Putin ordered tens of thousands of Russian troops into Ukraine in late February.
The EU’s subsequent ban on Russian oil is slated to come into effect at the end of the year.
