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Oil closes higher after recent losses

After closing in the red for three consecutive sessions, oil closed higher on the futures market this Wednesday (17).

The advance was supported by the unexpected drop in the stocks of the commodity in the United States. Some dollar relief against rivals and information of a recent increase in global demand for oil were also on the radar.

On the New York Mercantile Exchange (Nymex), WTI crude for September closed up 1.83% ($1.58) at $88.11 a barrel, and Brent for October rose 1.42% ( US$1.31), at US$93.65 a barrel, on the Intercontinental Exchange (ICE).

The session was markedly volatile, but assets managed to advance with information from the US Department of Energy (DoE, its acronym in English) that US oil inventories fell by 7 million barrels. Analysts had forecast a rise of 100,000 barrels. Gasoline inventories also fell much more than expected.

TD Securities notes that prices have rebounded to their lowest levels since late January. However, they remain constrained by concerns about erosion in demand across China and across the globe and the possibility of more Iranian oil entering market flows.

On Wednesday, the Joint Organizations Data Initiative (Jodi) reported that global oil demand and production – with the exception of China – grew by 1 million barrels per day (bpd) in both cases in June compared to May, bringing consumption to 98% of pre-Covid-19 pandemic levels and production to 96%.

The dollar’s limited strength against strong currencies was also followed, as the fall in the US currency favors buying by holders of other currencies.

Source: CNN Brasil

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