Oil rises on report of lower US crude inventories, stock market recovery
Oil prices rose on Wednesday amid a share market recovery and supported by a report that US crude inventories fell last week, although analysts warned that soaring US output and a seasonal demand drop could soon weigh on crude.
The higher oil futures came after stock markets recovered some of their steep losses of previous days. The market was supported by a report by the American Petroleum Institute (API) saying that US crude inventories fell by 1.1 million barrels in the week to Feb. 2 to 418.4 million barrels, traders said.
“Evidence points to a global inventory market that has arguably already balanced with days of forwarding cover in the low single digits or possibly even lower – which should support the spot price going forward,” said Richard Robinson, manager of the Ashburton Global Energy fund.
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Other analysts, however, warned of the risk of lower oil prices, both from financial markets and because of weaker seasonal demand. In the short-term, demand is expected to slow due to refinery maintenances at the end of the northern hemisphere winter season.