Limited US Oil Supply Triggers Price Increase to US$77.7 per Barrel


Oil prices increased on Wednesday (24/5) after supply and fuel US to be more limited.

Not only that, a warning from Saudi Arabia’s Minister of Energy to speculators raises the prospect of further OPEC+ production cuts.

Brent futures contract was up 86 cents, or 1.1 percent, to $77.7 a barrel by 0007 GMT, while US West Texas Intermediate (WTI) crude was up 88 cents, or 1.2 percent, to $73.79 per barrel.

Quoting Reuters, industry data late Tuesday showed sharp declines in US crude and fuel inventories.

Crude oil inventories fell by about 6.8 million barrels in the week ending May 19, according to market sources citing American Petroleum Institute figures on Tuesday.

Gasoline inventories fell by around 6.4 million barrels, while distillate inventories fell by around 1.8 million barrels.

If data from the Energy Information Administration, due for release on Wednesday, confirms the API numbers, US gasoline inventories will fall for the third straight week to their lowest pre-Memorial Day level since 2014.

Meanwhile, production cuts by some OPEC+ members went into effect this month.

Some investors interpreted that as a signal that the Organization of the Petroleum Exporting Countries (OPEC) and allies including Russia may consider further production cuts at a meeting on June 4.

[Gambas:Video CNN]



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