Oil is holding near a 13-week high on strong US demand and optimism in China.


Brent crude oil futures for August rose 12 cents to $123.70 a barrel 0033 GMT, while U.S. West Texas Intermediate crude oil for July was $122.17 a barrel. barrel, up 6 cents.

Both benchmarks closed Wednesday at their highest level since March 8, matching levels reached in 2008.

The United States saw a record drop in its strategic crude reserves even as commercial stocks rose last week, according to data from the Energy Information Administration (EIA) on Wednesday.

US gasoline inventories fell unexpectedly, indicating resilience in demand for fuel during the summer peak despite very high pump prices.

EIA data showed that apparent demand for all petroleum products in the US increased to 19.5 million barrels per day (bpd), while demand for gasoline increased to 8.98 million bpd. , ANZ analysts said in a note.

Investors will closely watch May trade data from China, due later Thursday, for demand from the world’s second-largest consumer of oil. Shanghai, the country’s largest business center, emerged from a two-month lockdown on June 1.

“China’s reopening has continued to drive demand optimism,” CMC Markets analyst Tina Teng said in a statement.

“The price of oil could head towards the March high above $130 in a very tight supply market.”

Efforts by OPEC+ oil producers to increase production are “not encouraging”, UAE Energy Minister Suhail al-Mazrouei said on Wednesday, adding that the group is currently at 2 .6 million bpd from its target.

Last week, the group agreed to accelerate the increase in production in order to contain soaring fuel prices and slow inflation. But this decision will leave producers with very little spare capacity, and almost no wiggle room to compensate for a major supply disruption.



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