2023.06.0813:08:00UTC+00Crude Oil Prices Extend Gains Amidst U.S. Inventory Draw

Crude oil benchmarks extended gains on Thursday amidst indications of draining crude oil inventory in the U.S.

Official data from the Energy Information Agency released on Wednesday had shown a crude oil inventory depletion of 0.45 million barrels in the week ended June 2. Markets were expecting a 1-million-barrel build in inventories versus a 4.5-million-barrel accumulation in the previous week. Gasoline stocks however increased 2.7 million barrels, much higher than the 0.88 million barrels that the markets were expecting. Gasoline inventories had reduced by 0.21 million barrels in the previous week.

Data released by the American Petroleum Institute on Tuesday had shown crude oil inventories in the U.S. falling by 1.7 million barrels in the same period, contradicting market expectations of a 1.5 million barrels build. Inventories had increased by 5.2 million barrels in the previous week.

The Fed's recent hints of a pause weakened the Dollar against the basket of 6 currencies. The Dollar Index or DXY lost 0.36 percent and dropped to 103.73, supporting sentiment in the crude oil market.

Earlier, Saudi Arabia had announced a further cut in crude oil production from the month of July, strengthening the sentiment for the black liquid.

Brent Oil Futures for August settlement traded between $77.67 and $75.51. It is currently at $77.40, having gained 0.58 percent from the previous close.

West Texas Intermediate Crude Oil Futures for July settlement traded between a high of $73.28 and a low of $72.08. The current price of $73.02 represents a gain of 0.68 percent from the previous close.

On the horizon is inflation data from China due later in the day. Markets would be keenly watching the same as the deflationary trend indicated in the readings of the previous month had raised questions about the post-pandemic rebound in China, impacting oil market sentiment. Annual inflation in May is seen rising to 0.3 percent, from 0.1 percent in the previous month. Month-on-month inflation is however seen steady at -0.1 percent.