Friday, 22 October, 2021
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Oil prices hold above $75 a barrel

Oil prices hold above $75 a barrel

LONDON: Oil slipped but held above $75 a barrel on Thursday, within sight of a near seven-week high hit a day earlier, supported by a big drop in U.S. crude inventories and expectations of recovering global demand. US crude inventories fell by 6.4 million barrels last week, more than analysts expected, as oil facilities offshore were still recovering from Hurricane Ida, report agencies.

The United States is the world’s largest oil consumer.

Brent crude was down 9 cents, or 0.1%, to $75.37 by 0815 GMT. On Wednesday, Brent touched $76.13, its highest since July 30. U.S. West Texas Intermediate (WTI) was down 4 cents at $72.57.

Brent has rallied 46% this year, supported by supply cuts by the Organization of the Petroleum Exporting Countries and allies, and some demand recovery from last year’s pandemic-related collapse.

“The recovery from the destruction caused by the coronavirus is genuinely under way,” said Tamas Varga of oil broker PVM. “Generally speaking the world is on the mend.” Adding to the signs of demand recovery, closely watched reports this week said world oil use will rise above 100 million barrels per day, a level last seen in 2019, as soon as next year’s second quarter.

Oil is also finding support from a surge in European power prices, which have sky-rocketed due to a host of factors including low gas inventories and lower-than-normal gas supply from Russia.