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Oil settles higher on U.S. inventory drop, Russia gas cuts

Commodities Jul 27, 2022 04:01PM ET
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© Reuters. FILE PHOTO: Sticker reads crude oil on the side of a storage tank in the Permian Basin in Mentone, Loving County, Texas, U.S. November 22, 2019. REUTERS/Angus Mordant
 
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By Laura Sanicola

(Reuters) -Oil settled up more than $2 on Wednesday as a report of lower inventories in the United States and cuts in Russian gas flows to Europe offset concern about weaker demand and a U.S. interest rate hike.

U.S. crude oil stockpiles dropped 4.5 million barrels last week as exports surged to an all-time high due to U.S. crude's big discount to international benchmark Brent, the Energy Information Administration said.

Brent crude rose $2.22, or 2.1%, to $106.62 a barrel. U.S. West Texas Intermediate (WTI) crude gained $2.28, or 2.4%, to $97.26.

After a sharp drop in the last two weeks, U.S. gasoline demand rebounded by 8.5% week on week, according to the data.

"All talk about demand destruction stopped in its tracks in this report...the situation has changed dramatically in two weeks," said Bob Yawger, director of energy futures at Mizuho.

Oil also continued to climb after the U.S. Federal Reserve decided, as expected, to raise its benchmark overnight interest rate by three-quarters of a percentage point in an effort to cool the most intense inflation since the 1980s.

"From here, oil could ride the wave of some increased risk appetite for a few sessions especially if the dollar weakens further," said Jim Ritterbusch, president of Ritterbusch and Associates in Galena, Illinois.

Oil has soared in 2022, reaching a 14-year high of $139 a barrel in March after Russia's invasion of Ukraine added to supply worries and as demand recovered from the pandemic.

Since then, concerns of economic slowdown and rising interest rates have weighed, despite supply outages in Libya and Nigeria and cuts in Russian gas flows to Europe.

Gas flows through the Nord Stream 1 pipeline fell to a fifth of the pipeline's capacity on Wednesday, while Italy's Eni said it will receive lower volumes from Russia's Gazprom (MCX:GAZP).

Oil settles higher on U.S. inventory drop, Russia gas cuts
 

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Comments (7)
Ken Roth
Ken Roth Jul 28, 2022 4:26AM ET
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Russian gas cuts to Europe means that USA are making billions of dollars in exporting LNG to Europe. Europe are building multiple LNG recipient terminals all over the coastlines so this will be a continued inflow of money from Europe to US for many years forward, because Putin has destroyed his golden egg and nobody in Europe will ever trust Putin anymore.
asd asd
asd asd Jul 28, 2022 4:26AM ET
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Nobody in Europe will trust him anymore are you having a laugh its Europe and Nato that is not trustworthy. Rest of the world doesnt trust Europe and rightfully so.
Ken Roth
Ken Roth Jul 28, 2022 4:26AM ET
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asd asd  I am just not understanding the strategy and why Russians are shooting themselves in the foot by destroying their golden egg and deliver this business to USA. Billions of dollars are now transferred to USA from Europe instead of to Russia. But I am sure that putin has a plan, whatever that is...
Alan Rice
Alan Rice Jul 27, 2022 1:35PM ET
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Here: Get your "Cheep Oil for All !!".
Joe Rizzuto
Joe Rizzuto Jul 27, 2022 10:35AM ET
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it is absolutely horrendous that europe by their own energy policies are held hostage by a psychopathic war-mongerer. worst still is the current u.s. admin has America vulnerable to the same energy insecurity policies. all because some naive teenager blames energy security for climate change.
EL LA
EL LA Jul 27, 2022 8:48AM ET
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Europe paying the equivalent of $350 oil and could should switch to oil from gas soon? Russia pulling out of the space station and building their own orbital station instead. This game of chess is getting heady. West still moving pawns.
Eagle Gon
Eagle_PT Jul 27, 2022 8:48AM ET
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Lol do you really believe Russia will build their own space station? don't believe all the Kremlin propaganda, they are building car without airbags now hehe
adolphus nimely
adolphus nimely Jul 27, 2022 3:58AM ET
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I'm Liberian, happy be on this network.
ZS Beck
ZS Beck Jul 26, 2022 10:22PM ET
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Today morning it was Tumbling? That was the news. A day later it's rising. Interesting.
Francis Lim Wei
Francis Lim Wei Jul 26, 2022 9:25PM ET
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this editor likes to spread fake news , oil drop from 97 to 94 last night due to rate hike retreat
Nice Direction
Nice Direction Jul 26, 2022 9:25PM ET
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Today Oil Up or down
Wkkze Zhfrz
Wkkze Zhfrz Jul 26, 2022 9:25PM ET
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Following
Wkkze Zhfrz
Wkkze Zhfrz Jul 26, 2022 9:25PM ET
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Following
Wkkze Zhfrz
Wkkze Zhfrz Jul 26, 2022 9:25PM ET
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Look like down to 93
Deivendiran Deivendiran
Deivendiran Deivendiran Jul 26, 2022 9:25PM ET
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Crooked
 
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