Oil futures: Prices rebound over 2% on US crude oil inventory draw
Quantum Commodity Intelligence – Crude oil futures Wednesday were climbing higher after inventory data from both the EIA and API revealed a fall in US crude stocks, although broader economic indicators also continued to direct sentiment for much of the session.
Sep23 ICE Brent futures were trading at $74.13/b (1740 GMT) compared to Tuesday's settle of $72.51/b, while the Aug23 contract was $73.91/b heading into expiry as the contango structure consolidated out to the Oct23 contract.
At the same time, Aug23 NYMEX WTI was trading $69.44/b versus Tuesday's close of $67.70/b.
This week's EIA data revealed a sharp 9.6 million barrel drop in crude oil stocks versus forecasts of a smaller draw of 1-2 million barrels.
Markets had earlier found support after American Petroleum Institute data released late Tuesday showed a fall in US commercial crude inventories of 2.4 million barrels last week, a larger drop than expected.
Gasoline stocks also fell 2.85 million barrels, although distillate stocks posted a 0.77-million-barrel increase, according to API data.
Prices had been under pressure in the previous session despite improved US economic indicators, including stronger consumer confidence, home sales, and durable goods orders.
"This strong set of data once again suggests that the Fed will likely have to hike rates further, which is obviously aligned with Jerome Powell's testimony last week," said Warren Patterson, head of ING's commodity research.
New home sales in the US jumped over 12%, the highest number in over a year, while consumer confidence rose to its highest level in 17 months for June.
Meanwhile, European Central Bank president Christine Lagarde signalled another rate hike is coming in July. Lagarde said it is unlikely the central bank can state "with full confidence that peak rates have been reached" in the near future.
A further round of US and European rate rises is seen as bearish for oil markets, stunting both economic growth and energy demand.
