Oil futures: Crude poised to close higher on US crude draw

Quantum Commodity Intelligence – Brent futures were poised to end the day 0.5% higher and WTI 0.8% up after trading in positive territory throughout most of the day on expectations of big US crude and gasoline draws.

Front-month September Brent futures were trading at $74.80/barrel (1630 GMT), after hitting an intraday high of $75.22/b.

They remained up from Tuesday's settlement of $74.48/b.

At the same time, the September WTI contract was trading at $72.26/b, versus Tuesday's settle of $71.65/b.

Prices were supported throughout the day by news of US stocks drawing.

First, the American Petroleum Institute industry group data projected U.S. crude stocks fell by 4.7 million barrels for the week ended July 23 with gasoline down 6.2 million barrels.

That underpinned the initial rise throughout the day, but prices eased ahead of the publication of the EIA figures, which were more modest, and said stocks fell 4.1 million barrels for crude and 2.25 million for gasoline.

Otherwise, the market appears torn between higher Covid-19 infection rates globally and relatively bullish transportation and fundamentals data that shows robust demand in Europe and the US.

The World Health Organization reported more than 400,000 new Covid-19 cases Tuesday, including clusters in Southeast Asia and rising numbers in the US, although the latter has failed yet to hit fuel demand.

Commerzbank noted: "The Delta variant appears to have lost much of its scare factor for the oil market. Instead, hopes are pinned on the success of the advancing vaccination campaigns and on the fact that new infections may soon pass their peak."