Oil strengthens as US crude inventories are expected to fall

By Laila Kearney

NEW YORK (Reuters) – Oil prices rose on Wednesday on estimates of dwindling U.S. oil and gasoline stocks, as the market watched a possible escalation of the war in the Middle East, which could reduce supply. global oil.

Brent crude futures rose 30 cents to $80.99 a barrel at 0009 GMT. U.S. West Texas Intermediate crude oil rose 38 cents to $78.73 per barrel.

U.S. crude oil and gasoline inventories were expected to have fallen last week, while distillate inventories rose, according to market sources, citing data from the American Petroleum Institute on Tuesday.

API figures showed that crude oil inventories shrank by 5.21 million barrels in the week ended Aug. 9, the sources said, speaking on condition of anonymity. Gasoline stocks decreased by 3.69 million barrels and distillates increased by 612 thousand barrels.

The drop in stocks could indicate greater demand in the USA, the world’s largest consumer of oil.

Official government data from the Energy Information Administration will be released later Wednesday.

The market was also awaiting signs of Iran’s next moves, which promised a severe response to the assassination of a Hamas leader late last month, which Tehran blamed on Israel. Israel has neither confirmed nor denied its involvement. The US Navy sent warships and a submarine to the Middle East to reinforce Israeli defenses.

A growing conflict in the region could affect crude oil supplies from Iran and neighboring producing countries, analysts said, reducing stocks and supporting prices.

To prevent oil prices from rising even further, the International Energy Agency (IEA), in turn, kept its global oil demand growth forecast for 2024 unchanged on Tuesday, but reduced its estimate for 2025. , citing the impact of a weakened Chinese economy on consumption.

(Reporting by Laila Kearney in New York; Editing by Muralikumar Anantharaman)