Oil prices rose on Wednesday as United States (US) crude gains for a seventh day.
The rallies followed an industry report which showed a further drop in inventories and investors shrugged off worsening developments as the COVID-19 pandemic rages on.
US West Texas Intermediate (WTI) was up 40 cents, or 0.8%, at $53.61 a barrel by 2:38am after gaining nearly 2% on Tuesday. Brent crude was up 47 cents, or 0.8%, at $57.05, having risen 1.7% in the previous session.
Both oil benchmarks are trading at the highest since February 2020, before the COVID-19 outbreak in China began spreading across the world and billions of people went into lockdowns to curtail spread of the pandemic.
“U.S. shale producers’ response to the rally in oil represents the most significant near-term supply risk for oil,” Reuters quoted Stephen Innes, chief global market strategist at Axi, as saying.
Falling inventories and rising oil prices are likely to tempt US drillers back into the fray, especially as Saudi Arabia and other major producers cut their output, effectively ceding market share to American producers, the news agency reports.
Data from the American Petroleum Institute late Tuesday showed that crude inventories in the US dropped by 5.8 million barrels last week to around 484.5 million barrels.