On Wednesday, when industry data showed U.S. stockpiles it has dropped far than analyst predicted. Meanwhile, oil prices gained as concerns about oversupply lighten.
Also, ahead of a brewing storm, the major U.S. producer evacuated rigs in the Gulf of Mexico.
West Texas Intermediate crude had mounted 93 cents, or 1.6%, to $58.76, having earlier increased to $58.84. Brent was above 70 cents, or 1.1%, at $64.86, after earlier touching $64.95.
This year, as the Organization of the Petroleum Exporting Countries and other big producers such as Russia, have restricted output to boost prices, the U.S. and global benchmarks expanded.
Weaker demands have raised fears on the ongoing trade tensions. Also, investors anticipate the signs that rapidly increase the consuming of U.S. production.
Last week, U.S. crude stockpiles plunged more than estimated.
At the same time, as shown on the data from industry group the American Petroleum Institute on Tuesday, gasoline inventories reduced, and extract stocks built.
According to the data, 8.1 million to as much as 461.4 million barrels fell as seen on the crude inventories in the week to July 5.
It is much higher than the expectations of the analyst for a decrease of 3.1 million barrels.
The government’s Energy Information Administration official figures are due later on Wednesday.
A technical analyst said, “Prices are finely balanced right now as investors await fresh stimulus,” then added, “The stimulus could come in the form of a sharp change in U.S. crude oil inventories.”
As the evacuating and shutting of the major producers in the Gulf of Mexico began together with production, U.S. oil prices were also supported.
It is because a tropical disturbance may become a storm later on Wednesday or Thursday.
The concerns about global economic growth pressured oil prices. Also, the U.S.-China trade war that crashed last year gives growing signs of harm.
Lower economic growth naturally means decreased demand for commodities, including such as oil.
On Tuesday, the EIA’s Short-Term Energy Outlook said that in 2019, U.S. crude oil production is predicted to rise to a record of 12.36 million barrels per day, higher than the 10.96 million bpd last year.
Russia lead OPEC and allied producers have agreed to extend their supply-cutting deal until March 2020. In 2019, backed by the pact and tensions in the Middle East, Brent has risen nearly 20%.
Gold Prices Decline
Meanwhile, ahead of the semiannual monetary policy report to Congress of Federal Reserve Chairman Jerome Powell, gold prices plunged from the psychological $1,400 level.
August delivery on the Comex division of the New York Mercantile Exchange of Gold futures dropped $2.45, or 0.2%, to $1,398.15 a troy ounce.
A senior commodity analyst said, “Powell’s testimony is expected to be perused word-for-word by gold traders.”
Also, “looking for clues on how the Fed chief will be voting at this month’s Federal Open Market Committee meeting.”
At the July 30-31 meeting, markets are still pricing in a 25-basis point reduction to interest rates. However, more aggressive easing is expected as they scaled back since last Friday’s strong jobs report.