By Adedapo Adesanya
The Brent crude oil grade hit its highest level since April on Thursday, selling at $87.55 per barrel after gaining 0.2 per cent or 21 cents amid reactions to the previous day’s decline in US inventories.
Also, the US West Texas Intermediate (WTI) crude futures were up by 18 cents at $84.06 in trade eased by the US Independence Day holiday.
The US Energy Information Administration (EIA) reported a draw in inventories of 12.2 million barrels, while analysts polled by Reuters had anticipated a draw of 680,000 barrels.
Traders were also keeping an eye on the conflict in Gaza as well as elections in France and the United Kingdom.
These gains came after a decline in crude oil stocks in the US that was larger than anything that was anticipated.
An unexpected drop in industrial orders in Germany occurred in May, adding to the growing evidence that suggests that Europe’s largest economy is still struggling to recover.
Demand concerns were heightened by data released by the US on Wednesday, which showed that the number of first-time applications for unemployment benefits increased last week, while the number of people without jobs also increased.
In response to this, analysts believe that weaker economic data could hasten interest rate cuts by the US Federal Reserve which could be beneficial for the oil markets during this time.
Meanwhile, Saudi Arabia’s Saudi Aramco cut the price for the flagship Arab light crude it will sell to Asia in August to $1.80 a barrel above the Oman/Dubai average.
The potential price reduction for Asia, which accounts for about 80 per cent of Saudi’s oil exports, underscores the pressure faced by producers in the Organisation of the Petroleum Exporting Countries (OPEC) as non-OPEC supply continues to grow while the global economy faces headwinds.
Swiss bank UBS expects Brent crude to reach $90 a barrel this quarter, it said in a note to clients, citing OPEC+ production cuts and projected declines in oil inventories.
Modupe Gbadeyanka