Oil prices edged up on Wednesday as the US inventory is set record larger than expected fall, signalling healthy demand in the world’s top oil consuming country.
Brent crude prices increased $1.48 to a two-week high of $66.36 a barrel, while the US light crude rose $1.50 at $61.64, Reuters reported.
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American Petroleum Institute (API) released a report that highlighted a larger than weekly fall in the US crude stocks.
Separately, the US Government predicted that domestic oil production would drop more strongly and for longer than expected.
According to the forecast by the US Energy Information Administration (EIA), the US oil output is expected to decrease by 160,000 barrels per day (bpd) in 2016.
Growth in the country’s oil production is expected to resume later in 2016, the government agency predicted.
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By GlobalDataABN Amro said in its June monthly commodity update: "With US production still around record levels, OPEC keeping its output quota unchanged at 30 million barrels per day and indications that OPEC members may even increase its production, the situation of oversupply will remain longer than expected."
Following Opec’s decision to maintain its production volume at its meeting last Friday, Saudi Arabia plans to supply more volumes of crude oil to at least two Asian term buyers next month.
