Oil prices keep overnight gains as demand hopes offset U.S. stock build

Reuters

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    * U.S. crude stockpiles rise for first time since May - EIA
    * U.S. gasoline, distillate inventories draw -EIA

    By Jessica Jaganathan
    SINGAPORE, July 22 (Reuters) - Oil prices held on to most of
their gains from the previous session on Thursday, as signs of
stronger demand helped offset an unexpected rise in U.S.
inventories.
    Brent crude  LCOc1  slipped 21 cents, or 0.3%, to $72.02 a
barrel at 0133 GMT, after rising 4.2% in the previous session.
U.S. West Texas Intermediate (WTI) crude  CLc1  fell 18 cents,
or 0.3%, to $70.12 a barrel, after rising 4.6% on Wednesday.
    "The market shrugged off a rise in (U.S.) commercial
inventories ... with most of the gains occurring on the West
Coast, a distribution system that is separate from the rest of
the country," analysts from ANZ Bank said in a note.
    "Supplies at Cushing, the WTI pricing point, fell to their
lowest level since January 2020," they added. 
    Crude inventories in the world's top oil consumer rose
unexpectedly by 2.1 million barrels last week to 439.7 million
barrels, up for the first time since May, U.S. Energy
Information Administration data showed.  USOILC=ECI  
    Analysts had expected a 4.5 million-barrel drop.  EIA/S 
    Still, gasoline  USOILG=ECI  and distillate  USOILD=ECI 
inventories posted draws of 121,000 barrels and 1.3 million
barrels, respectively, indicating higher demand due to the
summer driving season.
    With OPEC+, comprising the Organization of the Petroleum
Exporting Countries and allies like Russia, unlikely to get to
the market soon and Iranian negotiations delayed, the most
relevant risk to market fundamentals remains a deterioration of
demand due to new restrictions, analysts from Citi said. 
    "Only a really tremendous demand shortfall would tip the
market balance into a surplus," they added.
    JPMorgan analysts expect global demand to average 99.6
million barrels per day (mbd) in August, up by 5.4 mbd from
April.
    Oil prices fell earlier this week following a deal by OPEC+ 
to boost supply by 400,000 barrels per day from August through
December. 

 (Reporting by Jessica Jaganathan; Editing by Himani Sarkar)
 ((Jessica.Jaganathan@thomsonreuters.com; +65 6870 3822; Reuters
Messaging: jessica.jaganathan.thomsonreuters.com@reuters.net;
Twitter: https://twitter.com/j3ssi3))

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