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Oil prices rose in Asian trade early on Wednesday, following estimates of a large U.S. inventory draw and a warning from the Saudi energy minister for short sellers.
In early morning trade in Europe, Brent Crude was up above $78 per barrel, at $78.06, rising by 1.63%. The U.S. benchmark, WTI Crude, had risen by more than 1.81% and traded at $74.23.
Crude oil prices rose for a third consecutive day early on Wednesday, after gains on Monday and Tuesday, as the American Petroleum Institute (API) estimated late on Tuesday that crude oil inventories in the United States fell by 6.70 million barrels last week, compared with analyst expectations of a 525,000-barrel build.
Gasoline inventories dropped by 6.398 million barrels after falling in the week prior by 2.46 million barrels. Distillate inventories declined by 1.771 million barrels after decreasing by 886,000 barrels in the week prior, API’s data showed.
If the API data is confirmed by the U.S. Energy Information Administration (EIA) later on Wednesday, this would send U.S. gasoline inventories to the lowest level just before Memorial Day since 2014.
The U.S. continues to be stuck over negotiations on raising the debt ceiling, which has weighed on market sentiment in recent weeks.
However, Saudi Arabia’s Energy Minister, Prince Abdulaziz bin Salman, on Tuesday warned traders, again, against shorting oil futures, less than two weeks before the OPEC+ panel on production policy meets on June 4.
The comments from the most important oil official in the world’s top crude oil exporter raised speculation that OPEC+ could surprise markets again when the ministers of the alliance meet in early June.
“Energy traders have quickly learned that when it comes to oil prices, you ‘Don’t fight the Saudis’ as they will do whatever it takes to defend prices,”
Ed Moya, senior market analyst at OANDA, said late on Tuesday.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.