Oil prices rise for a second day on Chinese demand, US stocks fall By Reuters

By Jane Chung

SEOUL (Reuters) – Oil prices rose for a second day on Wednesday amid signs of strong demand from China 's refineries, the world' s second – largest crude oil user, under the impact of the tightening of oil prices. supply, with producers reducing production and US oil inventories falling unexpectedly.

International futures contracts rose 21 cents, or 0.29%, to $ 71.93 per barrel at 0319 GMT. Brent gained 0.5% to 72.08 per barrel, its highest level since November 8 and the highest this year.

The WTI (West Texas Intermediate) futures price is $ 64.45 per barrel, up 40 cents or 0.6% from their previous settlement.

"Prices have risen slightly as market sentiment has been boosted by an unexpected reduction in crude oil inventories in the United States and by tightening market fundamentals," said Benjamin Lu, commodity badyst at Phillip Futures. a Singapore-based broker.

The flow of the Chinese refinery in March rose 3.2% over the previous year, reaching 53.04 million tonnes, or 12.49 million barrels per day (bpd), revealed Wednesday. data from the National Bureau of Statistics.

Demand continues to grow in China, an agreement between the Organization of the Petroleum Exporting Countries (OPEC) and its allies, including Russia, to limit their production of 1.2 million barrels per day in 2019 has reduced global availabilities.

Crude oil supply also declined in 2019 as the United States imposed economic sanctions on OPEC members, Venezuela and Iran.

The tightening of supply and demand fundamentals has led to an increase of more than 40% in WTI this year and more than 30% in Brent.

In June, OPEC and its partners will decide if they want to continue to reduce production, although concerns have been expressed about Russia's willingness to stick to cuts.

Gazprom (MCX 🙂 Neft, the oil division of Russian gas company Gazprom, expects the oil deal between OPEC and its allies to end in the first half of the year, said Tuesday a manager of the company.

"The possibility that Russia will end the agreement with OPEC persists, which limits future gains," said Kim Kwang-rae, a commodity badyst at Samsung (KS 🙂 Futures in Seoul.

An unexpected drop in US crude inventories also contributed to higher oil prices.

US inventories of crude fell 3.1 million barrels during the week ended April 12, to stand at $ 452.7 million, while badysts expected an increase of 1.7 million barrels, according to data from the American Petroleum Institute (API) released Tuesday.

Official data on US inventories of the Energy Information Administration (EIA) are due to be released on Wednesday. [EIA/S]