LONDON – Oil slipped from a nearly seven-week high a day earlier, backed by a major fall in US crude inventories and hopes of a recovery in global demand, but remained above $75 a barrel on Thursday.
US crude inventories fell by 6.4 million barrels last week, higher than analysts expected, as oil facilities offshore were still recovering from Hurricane Ida.
The United States is the world’s largest oil consumer.
Brent crude was down 9 cents, or 0.1 per cent, at $75.37 as of 0815 GMT. Brent touched $76.13 on Wednesday, the highest level since July 30. US West Texas Intermediate (WTI) was down 4 cents at $72.57.
Brent has rallied 46 percent this year, supported by supply cuts by the Organization of the Petroleum Exporting Countries and Allies and some demand recovery from last year’s pandemic-related collapse.
“The recovery from the devastation caused by the coronavirus is really on,” said Tamas Varga of oil broker PVM. “Generally speaking the world is on the mend.”
Adding to the signs of improving demand, closely watched reports this week say world oil use will rise above the 100 million barrels per day last seen in 2019, as soon as next year. in the second quarter.
Oil is also supported by a jump in European electricity prices, which have skyrocketed due to a number of factors, including low gas inventories and lower-than-normal gas supplies from Russia.
“The rise in gas prices and the impact on oil is a situation that I believe will get much worse before it gets better,” said Jeffrey Haley, analyst at brokerage OANDA.
The weight on oil was a sign of resumption of recovery efforts in the US Gulf after Hurricane Nicholas, which was downgraded to a tropical depression.
American Gulf energy companies have been able to quickly restore pipeline service and power, allowing them to boost efforts to repair significant damage beyond Ida.
by Alex Lawler
This News Originally From – The Epoch Times