19-7-2023 (TOKYO) Global oil prices rose on Wednesday, buoyed by China’s pledge to support economic growth, tighter supply from Russia, and lower weekly U.S. crude oil inventories. Brent futures rose by 0.1% to $79.72 a barrel at 0010 GMT, while U.S. West Texas Intermediate (WTI) crude remained steady at $75.75 per barrel.
China’s top economic planner announced on Tuesday that it would introduce policies to “restore and expand” consumption in the world’s second-largest economy, given the weak purchasing power of consumers.
Russia has also pledged to reduce its oil exports by 2.1 million tons in the third quarter, in compliance with planned voluntary export cuts of 500,000 barrels per day in August, according to the energy ministry. This has contributed to the tightening of the oil supply across the market.
“Crude oil gained amid signs of further tightening across the market. Russia appears to be making good on its promise to reduce supply,” noted ANZ Research in a client note on Wednesday.
According to market sources citing figures from the American Petroleum Institute, crude oil, gasoline, and distillate inventories all fell last week, with crude stocks declining by about 800,000 barrels. The market is anticipating the weekly inventory report by the U.S. Energy Information Administration later on Wednesday, which is expected to show a further drawdown in U.S. crude oil inventories, providing more support to prices, ANZ’s note added.
