Oil prices rose on Wednesday after a drop in U.S. crude inventories bolstered OPEC’s robust demand outlook, as the market waited for further updates on the Colonial pipeline failure.
U.S. West Texas Intermediate (WTI) crude futures rose 29 cents, or 0.44%, to $ 65.57 a barrel at 0646 GMT, adding to a 36-cent rise on Tuesday.
Brent futures rose 31 cents, or 0.45% to $ 68.86 a barrel, adding to a 23-cent gain on Tuesday.
“Oil markets have maintained their wait-and-see approach to noise and racing seen elsewhere overnight,” wrote Jeffrey Halley, senior market analyst at OANDA, in a note Wednesday.
“The saga of cyberattacks on colonial pipelines continues and is now causing equipment shortages in the eastern United States.”
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“While a prolonged outage would favor refined product prices, it could begin to weigh on crude oil prices, if US Gulf Coast refiners are forced to cut operating rates due to a build-up. of stocks of refined products in PADD3, “ING analysts wrote in a note on Wednesday.
Colonial Pipeline said it hopes to restart much of the network by the end of the week.
Meanwhile, oil prices were supported by the latest outlook from the Organization of the Petroleum Exporting Countries (OPEC), which stuck with a forecast of a strong recovery in global oil demand in 2021, growth in China and the United States outweighing the impact of the coronavirus crisis in India.
OPEC said it expects demand to increase by 5.95 million bpd this year, unchanged from its forecast last month. However, it slashed its demand outlook for the second quarter by 300,000 bpd due to the surge in COVID-19 infections in India.
Data from the American Petroleum Institute industry group showed that U.S. crude oil inventories fell 2.5 million barrels in the week to May 7, two market sources said, slightly less than expected. .
The drawdown came before the Colonial pipeline was hit by a cyberattack last Friday that forced the pipeline, which carries more than 2.5 million barrels per day of fuel, to shut down.
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