Oil rises after sharp drop in U.S. crude inventories


Warning: This material has been prepared by a third party company, Reuters, which is independent of Davy. Davy has not reviewed the material and accepts no responsibility for errors or omissions, or for the information or opinions contained therein. It does not constitute investment advice.

    TOKYO, July 1 (Reuters) - Oil prices rose on Wednesday after
an industry report showed crude inventories in the United States
fell much more than expected, suggesting demand is improving
even as the coronavirus outbreak spreads around the world. 
    Brent crude  LCOc1  rose 33 cents, or 0.8%, to $41.60 a
barrel by 0044 GMT after declining more than 1% on Tuesday. U.S.
crude was up 42 cents, or 1.1%, at $39.69 a barrel, having
dropped by 1.1% in the previous session.
    U.S. crude and gasoline stocks declined more than expected
last week, while distillate inventories rose, data released by
the American Petroleum Institute (API) late on Tuesday showed.
    Crude inventories dropped by 8.2 million barrels to 537
million barrels, against analysts' forecasts for a draw of
710,000 barrels.
    "If the API estimates are vetted by the official government
agency data due out tomorrow, this will be viewed as a definite
bullish signal," said Stephen Innes, chief global markets
strategist at AxiCorp.
    "The reports could go a long way to easing some of those
lingering inventory concerns," he said.
    Inventory data from the U.S. government's Energy Information
Administration is due out later on Wednesday.
    Still prices are likely to be capped, analysts said, as the
world is awash with oil after the coronavirus caused demand for
fuel to drop by around a third. 
    A Reuters poll of analysts indicated that oil prices will
consolidate at around $40 a barrel this year, with a recovery
potentially picking up in the fourth quarter.  urn:newsml:reuters.com:*:nL8N2E63AM
    The virus continues to spread around the world with ever
increasing rates of infection. Cases now total more than 10
million with more than half a million people dying after
catching COVID-19.  urn:newsml:reuters.com:*:nL4N2AY3AS

 (Reporting by Aaron Sheldrick; editing by Richard Pullin)
 ((aaron.sheldrick@thomsonreuters.com; 81-80-2677-4134;))

Warning: This content may be provided by regulated and unregulated entities and is not created, reviewed or endorsed by Davy. It is provided for general information purposes only and does not constitute a recommendation or solicitation to purchase or sell any security or make any other type of investment or investment decision. Importantly, it does not constitute investment advice, as it does not contemplate the personal circumstances of any particular person or group of persons. Neither Davy nor the providers of the Third Party Content will be liable for any investment decision made based on the reliance on or use of such data, or any liability that may arise due to delays or interruptions in the delivery of the Third Party Content for any reason.