Falling US stocks are supporting oil prices. The “Delta” is the biggest challenge

Oil resumed its gains on Wednesday, after an industry report pointed to a drop in US fuel and oil inventories, adding to signs of tightening in the market.

New York Texas Intermediate crude futures rose 0.7% to trade above $ 72 a barrel, after falling for a second session on Tuesday, while Brent crude is close of $ 75 per barrel.

The American Petroleum Institute reported that gasoline inventories fell 6.23 million barrels last week, according to people familiar with the numbers. It would be the biggest drop in auto fuel inventories since March, if government data confirms it later on Wednesday.

The institute said US crude inventories fell 4.73 million barrels last week. It would be the ninth draw in 10 weeks if the EIA also confirms it. A Bloomberg survey showed stocks would drop 2.5 million barrels.

Global stocks are expected to decline over the remainder of the year, as major energy consumers continue to recover from the pandemic, although the recent Covid-19 resurgence raises concerns about the short-term demand outlook. term. The fast-spreading delta variable has led to further restrictions in some regions, with oil approaching only its second monthly loss since October.

Delta has posed a challenge to refineries that have been generating some of the best profits in years. Refiners want to make money, but fear that weak renewed demand will inflate inventories and squeeze profit margins again.

“The biggest risk to oil prices remains the delta variable, with many countries still grappling with the epidemic,” Sophro Sarkar, group research and energy manager at DBS Bank Ltd, told Bloomberg in Singapore. “European demand should continue to support prices at this time.