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US oil futures higher after US inventories draw; sentiment fragile

Published 04/09/2024, 21:58
Updated 05/09/2024, 12:58
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Investing.com -- U.S. crude oil futures edged higher Thursday, helped by a larger-than-expected decline in weekly US domestic crude stocks as well a possible delay to the arrival of additional supply to the market.

At 07:55 ET (11:55 GMT), Crude Oil WTI Futures traded 0.4% higher at $69.48 a barrel, while Brent futures gained 0.6% to $73.12 a barrel.

API details large stockpiles draw

U.S. crude inventories decreased by about 7.4 million barrels for the week ended Aug. 30, according to data from the American Petroleum Institute released on Wednesday, compared with a decline of 3.4M barrels the previous week. Economists were expecting a decline of just 900,000 barrels.

Gasoline stockpiles fell by about 300,000 barrels, while distillate inventories -- the class of fuels that includes diesel and heating oil -- fell by 400,000 barrels.

The official government inventory report is due later in the session.

OPEC future plans in spotlight

Also helping the tone were reports that the Organization of Petroleum Exporting Countries and allies, known as OPEC+, next month was considering delaying oil output hikes, which had been planned for next month.

Eight OPEC+ members are scheduled to boost output by 180,000 barrels per day in October, as part of a plan to begin unwinding their most recent layer of supply cuts of 2.2 million barrels per day.

"If these reports turn out to be correct, the next key question is how long the group will delay their supply increases. The oil balance is in surplus through 2025 (assuming OPEC+ increases supply) and so continuing cuts into 2025 might make sense," said analysts at ING, in a note.

Uncertainty over the global economy

However, gains are still limited Thursday amid concerns about global demand with a number of important economies showing signs of stress.

A official survey released over the weekend indicated that China's manufacturing activity sank to a six-month low in August, raising doubts about future consumption from this key market.

European economies are also struggling, while all eyes will be on further U.S. macroeconomic indicators later Thursday, including jobs data, to see how the world's largest economy is proceeding.

(Yasin Ebrahim contributed to this article.)

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