The price of oil rose by 0.4%, continuing yesterday's increase. Prices are supported by the negative dynamics of the US currency, improved investor appetite for risk and yesterday's data from the Energy Information Administration (EIA). However, the oil market is still limited by the range, and it needs either clarity on OPEC+ policy or a new catalyst to break out of the range.
The EIA report showed that crude inventories declined by 2.508 million barrels in the week ended May 10, following a drop of 1.362 million barrels in the previous week. It was the first back-to-back drop since March, taking nationwide holdings to the lowest in almost a month. Economists had predicted a fall of 1.350 million barrels. At the same time, gasoline stocks slipped by 0.235 million barrels. Analysts had forecast a build of 0.880 million barrels. The previous week recorded a gain of 0.915 million barrels. Elsewhere, distillate stocks dropped by 0.045 million barrels. Analysts had predicted an advance of 0.770 million barrels. The previous week registered an increase of 0.560 million barrels. Meanwhile, oil production in the U.S. remained unchanged at 13.100 million barrels per day. U.S. crude oil imports averaged 6.7 million barrels per day last week, logging a decrease of 226,000 barrels per day from the week before.
The rise in oil prices was also helped by US inflation data, which increased the likelihood of easing the Fed's monetary policy in September. This led to a sharp drop in the US dollar, making commodities more attractive for overseas buyers.
Investors are also watching the Russian president's visit to Beijing. Putin’s two-day visit to China comes at the invitation of Xi Jinping and will be the Russian leader’s first foreign trip since he began his fifth term in office last week. Xi said Beijing “will always work with Russia as a good neighbor, friend and partner” to safeguard “fairness and justice,” as both leaders signed a joint statement to deepen strategic cooperation.