NEW YORK: Oil prices rose on Thursday, notching further gains that pushed Brent past $75 a barrel the day after the U.S. government reported that crude stockpiles in the world's top oil consumer, fell to their lowest since January 2020.
Brent crude oil futures were up 92 cents, or 1.2pc, at $75.66 a barrel by 12:05 ET (1605 GMT), having traded as high as $75.74. U.S. West Texas Intermediate (WTI) crude oil futures were up 90 cents, or 1.3pc, at $73.29 a barrel.
In June, Brent topped $75 a barrel for the first time in more than two years, then fell back sharply this month on fears about the rapid spread of the Delta variant of coronavirus and a compromise deal by leading oil producers to increase supply.
Oil edges higher on inventory drawdowns, Brent tops $75 a barrel
"Crude oil is still running off of a sugar high off of yesterday's U.S. inventory numbers," said Bob Yawger, director of energy futures at Mizuho in New York. The market got an additional boost from a weaker U.S. dollar and signals from Iran that no nuclear deal was imminent, Yawger said.
Crude inventories fell by 4.1 million barrels in the week to July 23, the U.S. Energy Information Administration (EIA) said on Wednesday.
Data from information provider Genscape indicated that the inventories at the Cushing, Oklahoma storage hub continued to draw, traders said. Cushing stockpiles were seen at 36.299 million barrels, down -360,917 from July 23.
The U.S. economic recovery is still on track despite the rise in coronavirus infections, the U.S. Federal Reserve said on Wednesday in a policy statement that flagged ongoing talks around the eventual withdrawal of monetary policy support.
The dollar languished a day after the Federal Reserve's remarks that it has not yet set a time to start tapering its bond purchases and it depends on economic data.
Oil prices rise on signs of tightening supplies
The dollar index fell 0.41pc to 91.882, a level last seen on June 29. A sluggish dollar hoisted the euro up 0.39pc to $1.1888, its highest in more than 3 weeks. A weaker dollar can boost investor demand for dollar-denominated oil.
"While the risk to the demand outlook could increase due to governments across Europe reducing permission for public gatherings, we note that markets have already undergone several rounds of mobility restrictions... yet, the global recovery was not significantly derailed," analysts from Citi said in a note.
Also supporting prices was a statement from Iran blaming the United States for a pause in nuclear talks, which could mean a delay in a return of Iranian barrels to the market.