Crude Oil Regains Ground As Inventories Fall More Than Expected
(RTTNews) - Crude oil prices have shown a notable move to the upside during trading on Wednesday, partly offsetting the steep drop seen in the previous session.
After tumbling $1.07 or 1.7 percent to $62.35 a barrel, crude for September delivery was last seen trading up $63.14 a barrel, up $0.79 or 1.3 percent.
The rebound by the price of crude oil comes after the Energy Information Administration released a report showing crude oil inventories in the U.S. decreased by much more than expected in the week ended August 15th.
The EIA said crude oil inventories tumbled by 6.0 million barrels last week after rising by rising by 3.0 million barrels in the previous week. Economists had expected crude oil inventories to dip by 1.3 million barrels.
At 420.7 million barrels, U.S. crude oil inventories are about 6 percent below the five-year average for this time of year, the report said.
The report said gasoline inventories also fell by 2.7 million barrels last week and are 1 percent below the five-year average for this time of year.
Meanwhile, the EIA said distillate fuel inventories, which include heating oil and diesel, rose by 2.3 million barrels last week but remain about 13 percent below the five-year average for this time of year. Traders were also reacting to reports that Indian state-run refiners have resumed purchases of Russian oil for September and October delivery after discounts widened.
India is welcome to export its products to Russia if it is facing trouble entering the U.S. market, a senior Russian diplomat said.
Addressing a press conference, Russian Deputy Chief of Mission Roman Babushkin said the pressure on India over the latter's procurement of Russian crude oil was "unjustified" and "unilateral".
"The sanctions are hitting those who are imposing them. It is a challenging situation for India, but we have trust in our ties. We are confident that India-Russia energy cooperation will continue notwithstanding the external pressure," Babushkin said.
