Oil prices rise despite rising inventories in the United States

LONDON, June 8 (Reuters) – Oil prices rose on Wednesday, despite a likely rise in U.S. oil stocks, due to the easing of Chinese COVID-19 lockdowns and a possible strike by Norwegian oil workers.

Brent crude futures were up $1.32, or 1.1%, at $121.89 a barrel at 12:13 GMT. U.S. West Texas Intermediate crude was at $120.80 a barrel, up $1.39 or 1.2%.

“Despite API report showing builds for crude and petroleum products, oil prices are higher, supported by expectation that China will ease COVID restrictions, translating into higher demand and imports this summer,” said UBS analyst Giovanni Staunovo.

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A number of Norwegian oil workers plan to strike from June 12 over their pay, putting some crude oil production at risk of a halt. Read more

According to market sources, figures from the American Petroleum Institute showed on Tuesday that US crude inventories rose by 1.8 million barrels for the week ended June 3. Gasoline and distillate inventories increased by 1.8 million barrels and 3.4 million barrels, respectively.

The US Energy Information Agency (EIA) will release last week’s inventory levels at 10:30 a.m. EDT (2:30 p.m. GMT) on Wednesday.

The World Bank cut its 2022 global growth forecast by almost a third on Tuesday, warning that Russia’s invasion of Ukraine had worsened the damage of the COVID-19 pandemic and that many countries were now facing recession. Read more

Meanwhile, global supplies of crude and petroleum products remain tight, pushing Asian refiners’ diesel margins to record highs, as Western sanctions hamper exports from Russia’s top producer. Read more

The CEO of global commodities trader Trafigura said oil prices could soon hit $150 a barrel and rise this year, with demand destruction likely by the end of the year.

Most of the world’s refineries are already operating near capacity to meet growing demand from the pandemic recovery and to replace lost Russian supplies.

JP Morgan analysts estimate that Russia has cut around 500,000 to 700,000 barrels per day of its petroleum product exports as it now finds it harder to market fuel than to sell crude.

“Unless new capacity in the Middle East comes online faster than expected or China decides to lift export caps on its products, the shortage of clean products will only get worse as demand for transportation fuels will increase during the Northern Hemisphere summer,” they said in a statement. Remark.

Weak reserve oil production capacity, which is expected to fall to record lows, has also pushed prices higher. Read more

On Tuesday, China increased its first batch of commodity export quotas aimed at reducing high domestic stocks, which rose as pandemic shutdowns weighed on demand. Despite the latest additions to the quotas, however, their volumes remain well below those of last year. Read more

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Additional reporting by Florence Tan and Muyu Xu in Singapore Editing by Mark Potter and Louise Heavens

Our standards: The Thomson Reuters Trust Principles.

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Felix J. Dixon