(Bloomberg) — Oil climbed to a five-month high in London, topping $45 a barrel after U.S. industry data showed a decline in the nation’s stockpiles.
Brent futures gained for a fourth day, rising as much as 1.7% to the highest price since March 6. The American Petroleum Institute reported a 8.59 million-barrel drop in crude inventories last week, according to people familiar with the figures. Meanwhile, European equities and U.S. futures advanced on signs American lawmakers are making progress on an economic aid package.
Oil has struggled to maintain its momentum after rallying from a plunge below zero in April as rising coronavirus infections raise concerns about a sustained recovery in consumption. OPEC is set to test the market by returning some supply this month after historic output curbs, while Saudi Aramco is poised to delay the release of its official selling prices for September as producers face pressure to reduce the cost of their crude with demand ebbing.
“Oil prices are rising, pricing in what looks like a sizable decline in U.S. crude inventories,” said Bjornar Tonhaugen, head of oil markets at Rystad Energy.
A Bloomberg survey shows U.S. crude stockpiles probably fell by 3.35 million barrels last week. That would be the third weekly decline in four weeks if confirmed by official data from the Energy Information Administration later on Wednesday.
The forecast drop follows a sharp reduction in U.S. crude production since March. And on Tuesday, American shale drillers signaled the end of output growth, with Diamondback Energy Inc.’s chief executive officer saying there are currently no market signals that such growth is needed.
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