New York - Oil prices rose nearly 2% on Wednesday following a drawdown in U.S. crude inventories from record highs and a string of positive manufacturing data, but a surge in coronavirus cases tempered gains.
Brent crude LCOc1 rose 80 cents, or 1.9%, to $42.07 a barrel by 12:43 p.m. EDT (1643 GMT). U.S. crude CLc1 rose 59 cents, or 1.5%, to $39.86 a barrel.
U.S. crude inventories USOILC=ECI fell more than expected, dropping by 7.2 million barrels last week, after hitting all-time highs for three consecutive weeks, Energy Information Administration data showed. Analysts had expected a 710,000-barrel drop.
Much of the drawdown was attributed to refiners ramping up production after reducing runs this spring because of the pandemic, as refinery utilization rates USOIRU=ECI rose by 0.9 percentage point to 75.5%, their highest since early April.
“Largely we are moving forward in the way of demand and not backward, despite the negative view of coronavirus cases rising,” said Tony Headrick, energy markets analyst at CHS Hedging.
Improving global economic activity supported prices as well. In China, factory activity grew at a faster clip in June, a private business survey showed.
Germany’s manufacturing sector contracted at a slower pace in June, while French factory activity rebounded into growth.
In a sign that fuel demand is recovering, tens of millions of barrels of crude and oil products stored on tankers at sea due to the coronavirus crisis are being sold, shipping sources said.