Oil prices recover on reports of fall in US inventory

31 May 2017 (Last Updated May 31st, 2017 18:30)

Oil prices have recovered after slipping to a three-week low in the previous session amid reports of a fall in US crude stocks.

Oil prices have recovered after slipping to a three-week low in the previous session amid reports of a fall in US crude stocks. 

Brent crude futures for July LCOc1 gained 58 cents to touch $51.34 a barrel, while the US West Texas Intermediate crude CLc1 futures climbed 64 cents and traded at $48.96, reported Reuters.

Crude prices also gained support from the expectations that US may pull out from the global climate accord.

US President Donald Trump is expected to announce the decision on whether the country would continue to accord with the global pact to fight climate change.

"If he actually withdraws the US from the climate accord, this would signal his intention to further roll-back emission regulations that would favour the use and demand of fossil fuels."

Phillip Futures Singapore investment analyst Jonathan Chan was quoted by the news agency as saying: “If he actually withdraws the US from the climate accord, this would signal his intention to further roll-back emission regulations that would favour the use and demand of fossil fuels, thus giving a much-needed boost to oil prices.”

American Petroleum Institute (API) reported that US crude inventories in the week ending 26 May declined by 8.7 million barrels to 513.2 million against the expectation of a fall of 2.5 million barrels. 

A survey by Reuters found that oil output from the Organization of the Petroleum Exporting Countries (OPEC) increased last month. 

Higher productions from Nigeria and Libya have largely negated the oil curb compliance followed by other members of the oil cartel.