Oil prices hold their ground after US inventory drawdown

Global oil prices rose on Wednesday in American trade for the first time in five sessions, holding above six-week lows, after a drop in US crude stocks.

Prices are also boosted by the dollar’s recent dip against a basket of rivals, following weak US industrial data, which boosted the odds of multiple Fed rate cuts this year.

Prices

 US crude rose 0.8% today to $77.99 a barrel, with a session-low at $77.01.

Brent rose 0.6% today to $81.90 a barrel, with a session-low at $80.97. 

On Tuesday, US crude lost 1%, marking six-week lows at $76.43. 

Brent shed 0.9%, the fourth loss in a row, plumbing June 10 lows at $80.55. 

The recent wave of losses that engulfed oil prices are due to concerns about weakening demand from China, the world’s second largest fuel consumer.

US Stocks 

Official data from the Energy Information Administration showed commercial crude stocks fell by 3.7 million barrels in the week ending July 10, the fourth decline in a row, passing estimates of a drop of 2.6 million barrels. 

According to the data, official US stocks are now down to 436.6 million barrels, the lowest since early February, and a positive sign for demand in the US.

The Dollar

The dollar index fell by over 0.3% on Wednesday against a basket of major rivals. 

A weaker dollar usually underpins greenback-denominated commodity futures as they become cheaper to holders of other currencies. 

The decline after earlier weak US industrial data boosted the case for Fed rate cuts in September and November.