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Oil prices climb as U.S. equities rally, rig count drops

03 July 2019 23:17 (UTC +04:00)

Oil prices edged higher on Wednesday ahead of a U.S. holiday, after falling steeply a day earlier as worries about a slowing global economy outweighed a decision by OPEC and allies to extend crude output cuts, ONA reports quoting Reuters.

Strength in the U.S equities market and data showing U.S. energy firms this week reduced the number of oil rigs operating for the first time in three weeks helped support oil prices.

Each of the major U.S. stock indexes finished at a record closing high, as expectations grew that the Federal Reserve would take a more dovish turn as a raft of data provided more evidence of a slowing economy.

U.S. oil drillers cut five oil rigs in the week to July 3, bringing the total count down to 788, General Electric Co’s (GE.N) Baker Hughes energy services firm said in its closely followed report. Record U.S. crude production has pressured prices over the past year.

September Brent crude futures LCOc1 ended the session up $1.42, or 2.3%, at $63.82 a barrel. U.S. crude futures for August delivery CLc1 settled up $1.09, or 1.9%, at $57.34 a barrel. On Tuesday, both benchmarks fell more than 4% on worries about a global economic slowdown.

Gains were pared after data showed U.S. crude inventories USOILC=ECI fell by 1.1 million barrels in the latest week, much less than the 3-million-barrel decrease analysts had expected. [EIA/S]

“The market is disappointed by a very small crude oil inventory draw. ... The only sign of strength in the market is the continued modest decline of gasoline inventories,” said Andrew Lipow, president at Lipow Oil Associates in Houston.

U.S. gasoline futures led the energy complex, rising about 2.5% to settle at $1.9167 a gallon.