Oil up over unexpected draw in US inventories

LONDON, July 29, 2020 – Oil was up on Wednesday morning in Asia after the American Petroleum Institute (API) recorded a big draw in inventories, but the US Congress’ struggle to reach a deal on a new Covid-19 aid package capped gains.

Brent oil futures gained 0.11% to $43.66 by 11:32 PM ET (4:32 AM GMT) and WTI futures gained 0.02% to $41.05.

The black liquid gained on the back of the API recording a larger than expected draw in inventories in the US on Tuesday. There was a 6.829 million barrel draw last week, higher than the forecast of a 1.2-million-barrel draw prepared by Investing.com.

“This should temporarily alleviate some concerns about ongoing demand distress,” Stephen Innes, AxiCorp’s chief global markets strategist, said in a note.

But delays in the approval of a new Covid-19 stimulus package in the US is putting pressure on oil prices. The White House and Republicans in Congress have not yet finalized a plan for a new package worth $1 trillion that was first put forward Tuesday. Negotiations aimed at reaching a compromise bill with Democrats also failed.

The Covid-19 pandemic continues to rage on, also putting pressure on oil prices. The number of cases globally has reached 16.6 million while the number of deaths has topped 650,000 as of July 29, according to Johns Hopkins University data.

By Investing.com: https://www.investing.com/news/commodities-news/oil-up-over-surprise-build-in-us-inventories-2244425

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