InfoQuest – The West Texas Intermediate (WTI) crude oil market in New York closed positive on Wednesday (July 3) after the United States revealed a larger-than-expected drop in crude oil inventories. However, the market was pressured during the day by concerns over a build in global oil inventories amid light trading volume ahead of the US National Day holiday.
West Texas Intermediate crude futures, due for delivery in August, rose $1.07, or 1.29%, to settle at $83.88 a barrel.
Brent crude futures for August delivery rose $1.10, or 1.28%, to close at $87.34 a barrel.
The U.S. Energy Information Administration said U.S. weekly crude oil inventories fell by 12.2 million barrels, more than analysts' expectations in a Reuters poll for a draw of just 680,000 barrels.
Gasoline stocks fell by 2.2 million barrels, more than analysts' expectations for a 1.5 million-barrel draw, and distillate stocks, including heating oil and diesel, fell by 1.5 million barrels, more than analysts' expectations for a 1.1 million-barrel draw.
Oil prices were also supported by expectations that Hurricane Beryl will impact oil supplies. This comes despite the US National Hurricane Center forecasting that Hurricane Beryl will weaken as it moves into the Gulf of Mexico this week. However, the impact of the hurricane is expected to bring heavy rain and strong winds. This will impact Mexico’s offshore oil production and export infrastructure. It will also lead to tighter oil supplies. Mexico is one of the major oil producing countries.
However, oil prices fell in a positive period. After it was reported that oil production from OPEC countries rose for the second consecutive month in June, including the purchasing managers' index (PMI) for the services sector in China in June, which slowed to an 8-month low and China is the world's largest importer of crude oil. The slowdown in Chinese economic activity could also slow demand for oil.
*New York oil market will be closed on Thursday (July 4) for US National Day*