By Adedapo Adesanya
Brent crude rose by 43 cents or 0.38 per cent to $114.46 per barrel on Wednesday as the Energy Information Administration (EIA) reported that crude oil inventories in the United States shed one million barrels compared with the preceding week’s draw of 3.4 million barrels.
Also, the West Texas Intermediate (WTI) crude futures appreciated by 57 cents or 0.52 per cent yesterday to $110.90 per barrel as the agency disclosed that at 419.8 million barrels, crude oil inventories are 14 per cent below the five-year average for this time of the year.
Crude oil prices also remained elevated as the demand/supply situation remains unchanged even though worry about recession has served to limit the upside potential of benchmarks.
On the demand front, Shanghai is scheduled to see lockdowns end on June 1 after a gradual easing beginning on May 21.
This is coming after risks of a rebound in infections were controlled as authorities implemented epidemic prevention and control to fully restore normalcy to production and life in the city.
Meanwhile, Beijing stepped up quarantine efforts to end its month-old COVID outbreak.
Global crude supplies continue to tighten as buyers avoid oil from Russia, the world’s second-largest exporter, after the invasion of Ukraine.
European companies, among others, have taken it upon themselves not to patronize Russian crude which has led to a record amount of Urals crude oil sitting in vessels at sea struggling to find buyers.
This is happening as the European Union (EU) hopes to agree on sanctions that would phase out Russian oil imports before the next meeting of the European Council, its president, Mr Charles Michel, said on Wednesday.
Also, the market is high with this weekend’s Memorial Day travel in the US, which is expected to be the busiest in two years, causing fuel demand to rise as more drivers hit the road and shake off coronavirus pandemic restrictions despite high fuel prices.
The de facto leader of the Organisation of the Petroleum Exporting Countries (OPEC), Saudi Arabia, signalled once again it had no plans to boost production further.
Modupe Gbadeyanka