Oil prices rise, shaking off rise in crude inventories

Oil futures rose Wednesday, extending a bounce from a recent pullback as investor appetite for risky assets revived, despite industry data late Tuesday showing an unexpected rise in U.S. crude inventories ahead of a government storage report on Wednesday.

West Texas Intermediate crude for September delivery

rose $1.29, or 1.9%, to $68.49 a barrel on the New York Mercantile Exchange. September Brent crude

the global benchmark, gained $1.37, or 2%, to trade at $70.72 a barrel on ICE Futures Europe.

Oil bounced higher on Tuesday, with the U.S. benchmark rebounding from a 7.5% fall on Monday that marked its biggest one-day drop since March. Equity markets and other assets perceived as risky, which were also slammed on Monday, have also rebounded sharply on ideas worries over the spread of the delta variant of the coronavirus that causes COVID-19 were overdone.

Crude’s bounce comes despite data from an industry trade group late Tuesday showing an unexpected rise in U.S. crude inventories, putting the spotlight on the official take from the Energy Information Administration later Wednesday.

“Wednesday’s EIA report has the potential to put a floor in the market or accelerate the slide in prices. 

The American Petroleum Institute reported late Tuesday that U.S. crude supplies climbed by 806,000 barrels for the week ended July 16, according to sources. The API report also reportedly showed a climb of 3.3 million barrels for gasoline stockpiles, but distillate inventories fell by 1.2 million barrels.

On average, the EIA is expected to show crude inventories declined by 6.7 million barrels, according to a survey of analysts conducted by S&P Global Platts. The survey also calls for supply decreases of 1.1 million barrels for gasoline and 600,000 barrels for distillates.

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