Oil prices rose on Wednesday, with gaining for a seventh day, after an industry report showed a further drop in inventories and investors shrugged off worsening developments in the pandemic.
U.S. West Texas Intermediate (WTI) was up 40 cents, or 0.8%, at $53.61 a barrel by 0128 GMT after gaining nearly 2% on Tuesday. was up 47 cents, or 0.8%, at $57.05, having risen 1.7% in the previous session.
Both benchmarks are trading at the highest since February, before the coronavirus outbreak in China began spreading across the world and billions of people went into lockdowns to prevent a pandemic that is now in a deadlier second wave.
Prices are shrugging off the latest developments in Europe and the United States where death tolls and new infections keep rising, with the focus on rollouts of vaccines, however patchy, but risks to the market remain.
“U.S. shale producers’ response to the rally in oil represents the most significant near-term supply risk for oil,” said Stephen Innes, chief global market strategist at Axi.
Falling inventories and rising oil prices are likely to tempt U.S. drillers back into the fray, especially as Saudi Arabia and other major producers cut their output, effectively ceding market share to American producers.
Crude inventories in the U.S. dropped by 5.8 million barrels last week to around 484.5 million barrels, data from the American Petroleum Institute showed late on Tuesday.[API/S]
That was more than analysts’ expectations in a Reuters poll for a fall of 2.3 million barrels.