Oil futures were trading slightly higher early Wednesday, but off their best levels, after a report on U.S. inventories pointed to a big decrease in domestic supplies ahead of a closely followed government report on stockpiles.
A report from American Petroleum Institute reported late Tuesday showed that U.S. crude supplies fell by 8.2 million barrels for the week ended June 26, according to sources. “This is relatively bullish for Oil if tomorrow’s official inventory report confirms the API draw,” wrote Stephen Innes, global chief market strategist at AxiCorp, in a daily research note.
Inventory data from the Energy Information Administration will be released Wednesday at 10:30 a.m. Eastern Time. The EIA data are expected to show crude inventories declined by 2.7 million barrels last week, according to analysts polled by S&P Global Platts.
The decrease in U.S. supplies has injected some optimism in crude markets, which have been whipsawed by anxieties around the growing spread of COVID-19 and the impact of the contagion on crude demand.
The API data also reportedly showed gasoline stockpiles down by 2.5 million barrels, while distillate inventories rose by 2.6 million barrels. Crude stocks at the Cushing, Okla., storage hub, meanwhile, edged up by 164,000 barrels for the week, sources said.
On Wednesday, West Texas Intermediate crude for August rose 15 cents, or 0.4%, at $39.41 a barrel on the New York Mercantile Exchange.
So far this year, prices based on the front-month contracts, were nearly 36% lower, according to Dow Jones Market Data. For the quarter, however, prices rose nearly 92%.
Meanwhile, global benchmark Brent oil for September, currently the most-active contract, picked up 12 cents, or 0.2%, to $41.36. Front-month contract prices fell by almost 38% year to date, but was up nearly 81% in the second quarter of 2020.
Crude prices briefly turned negative and then bounced back into the green after a report on private-sector from Automatic Data Processing Inc. showed that employers added 2.37 million jobs in June. Economists surveyed by Econoday expected a gain of 3.5 million.