Oil rose as industry data showed a decline in American stockpiles, countering speculation that the ouster of U.S. National Security Adviser John Bolton may lead to a less hawkish approach on Iran and Venezuela.
Futures added as much as 1.6% in New York, after dipping 0.8% on Tuesday. The American Petroleum Institute reported a 7.23 million-barrel weekly drop in crude inventories, according to people familiar with the figures. That’s a steeper decline than forecast in a Bloomberg survey, ahead of government data due later Wednesday.
Oil is still down about 12% from its peak in April as a deepening trade dispute between the U.S. and China dents the global demand outlook. Prices fell on Tuesday -- halting a four-day gain -- after Bolton’s exit gave the market some supply comfort. Yet the API’s stockpile data prompted a rebound.
“Oil prices are regaining some ground this morning as attention shifts to U.S. oil inventories,” PVM Oil Associates analyst Stephen Brennock wrote in a report.
West Texas Intermediate oil for October delivery rose 50 cents, or 0.9%, to $57.90 a barrel on the New York Mercantile Exchange as of 8:39 a.m. New York time.
Brent for November settlement increased 60 cents, or 1%, to $62.98 a barrel on the ICE Futures Europe Exchange. The global benchmark traded at a $5.16 premium to WTI for the same month.
U.S. crude stockpiles fell to about 423 million barrels in the week through Aug. 30, the lowest since October 2018, according to government data. A Bloomberg analyst survey shows the level shrinking by a further 2.9 million barrels last week, which would be a fourth weekly drop if confirmed by Energy Information Administration data on Wednesday.
U.S. President Donald Trump said he fired Bolton after disagreeing with many of his positions. His adviser’s departure may be “a catalyst for a material de-escalation in the Iran standoff” and could bring back around 700,000 barrels a day of Iranian crude, possibly by the first quarter, said RBC Capital Markets’ Global Head of Commodity Strategy Helima Croft. Iran’s output has slumped 42% since May 2018, according to data compiled by Bloomberg.
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