Oil Edges Close To $75/Barrel As Crude Inventories Drop

Oil approached the $75-mark on Wednesday as investors shrugged off rising coronavirus cases to focus on an industry report which is expected to show U.S. crude inventories fell more than expected.

Brent crude rose 23 cents, or 0.3%, to $74.71 a barrel on Wednesday afternoon, after posting on Tuesday its first decline in six days. U.S. West Texas Intermediate (WTI) crude advanced 33 cents, or 0.5%, to $71.98.

U.S. crude stocks fell 4.7 million barrels, two market sources citing American Petroleum Institute figures said, more than analysts forecast. Official U.S. Energy Information Administration inventory figures are expected later this afternoon, and the dollar was firm as of report time.

Oil has gained 44% this year, aided by demand recovery and supply curbs by the Organization of the Petroleum Exporting Countries and allies, known as OPEC+.

OPEC+ agreed to increase supply by 400,000 barrels per day from August, unwinding more of last year’s record supply cut, but this is seen as too low by some analysts given the rebound in demand expected this year.

A rising number of coronavirus cases worldwide, despite vaccination programmes, has limited the upside for oil and remains a concern.