Brent crude rose as much as $66 a barrel after finishing little changed Tuesday, with West Texas Intermediate above $62. The American Petroleum Institute reported a drop of 1.8 million barrels at the Cushing, Oklahoma, hub last week, as well as a decline in product inventories including gasoline. National crude reserves are estimated to have increased, although they remain near seasonal lows.
Crude remains under pressure on expectations of an oversupply in the coming months, with the Organization of the Petroleum Exporting Countries and its allies increasing production in a bid to regain market share. In the United States, official forecasts indicate that domestic crude production will hit a record this year, thanks to increasing offshore supplies.
Meanwhile, the latest round of Ukrainian drone strikes against Russian oil infrastructure has reduced domestic processing and led to increased crude exports. Flows of unprocessed oil held at a 16-month high over the past four weeks, according to ship tracking data monitored by Bloomberg.
“Until the physical market shows signs of slowing via rising inventories, investors will likely ignore the impact of production increases,” ANZ Group Holdings Ltd. analysts, including Daniel Hynes, said in a note.
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