Oil Price Hits New High on Rising Demand, Falling Inventories

Oil extended its run of gains on Wednesday, climbing towards $75 a barrel to its highest since April 2019 due to a recovery in demand from the pandemic and a drop in U.S. crude inventories.

Inventories dropped by 8.54 million barrels last week, according to people familiar with the American Petroleum Institute’s data. That would take levels to the lowest in over a year if confirmed by government data due later Wednesday. Oil is also being helped higher by positive demand signals from Asia.

Indian gasoline and diesel sales rebounded in the first half of June as the number of new Covid-19 cases in the country slowly started to ease. China processed a record volume of crude oil last month on a barrels-a-day basis, according to a Bloomberg report.

Global oil benchmark Brent rose 0.2%, after earlier approaching $75 a barrel. West Texas Intermediate also increased 0.2%. Prices pared some earlier gains in tandem with equity markets.

Oil’s rally has been reinvigorated this month as leading economies continue to reopen, aided by widespread vaccine programs. That’s boosting worldwide energy demand just as the Organization of Petroleum Exporting Countries and its allies maintain a cautious approach to boosting supply.