U.S. Crude Oil Stockpiles up Unexpectedly, First Time in 9 Weeks By Investing.com

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By Barani Krishnan and Liz Moyer

Investing.com — Oil prices jumped 5% on Wednesday, rising even after a surprise build in crude stockpiles that snapped eight weeks of declines, as bulls attempted to seize back control of the market after this week’s plunge.

{ecl-75||Crude inventories}} showed a build of 2.108 million barrels during the week ended July 16, the Energy Information Administration said, wrong-footing analysts who had expected a draw of 4.466 million barrels.

It was the first build since draws that began in late May that removed more than 40 million barrels from stockpiles and helped U.S. oil prices to four-year highs of almost $78 a barrel as market punters bet on record fuel consumption in an economy reopening from Covid lockdowns.

inventories also fell less than expected, drawing just 121,000 barrels last week, according to the EIA, versus expectations for a drop of 1.043 million barrels.

stockpiles, which include diesel and , were the only numbers on the positive side. These declined by 1.349 million barrels against forecasts for a build of 557,000 barrels.

New York-traded , the benchmark for U.S. oil, settled up $3.10, or 4.6%, at $70.30 a barrel.

WTI had tumbled 7.5% to under $67 a barrel on Monday for its worst sell-off in 16 months on worries about an output hike announced by producer group OPEC+ and reports of resurfacing cases of Covid-19.

London-traded , the global benchmark for oil, settled up $2.88, or 4.2%, at $72.23. Brent lost 6.8% on Monday.

“It looks like pay-back time for the bulls as the overall rebound in risk appetite on Wall Street has put some wind behind the oil market,” said John Kilduff, founding partner at New York energy hedge fund Again Capital. “The seasonal peak in gasoline consumption is over and if the EIA continues reporting builds like this for the next few weeks amid the new Covid scare, then I doubt prices would continue trending higher.”

COVID case rates have been rising in the United States, where 47 of the 50 states have reported more infections than the previous week from the highly-transmissible Delta variant.

Global cases involving the Delta variant have also surged in recent weeks, prompting some countries, including Australia and South Korea, to reintroduce restrictive measures. The United Kingdom on Saturday reported the highest number of daily Covid-19 cases since Jan 2021.



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