Oil prices have managed to recover some of the ground lost on Tuesday, despite industry data suggesting that the US crude inventories were less than expected.
Brent crude futures gained 53 cents to $64.88 a barrel, while West Texas Intermediate crude futures were up by 31 cents at $57.93 a barrel, Reuters reported. Both benchmarks lost more than 3% on Tuesday.
The American Petroleum Institute (API) said on Tuesday that crude inventories fell by 1.4 million barrels in the week ending 12 July to 460 million barrels. Analysts had expected a decline of 2.7 million.
The fall was lower than expected, which indicate that production shut-down due to Hurricane Barry last week had minimal impact on inventories.
According to the API data, there was a less-than-expected decline in gasoline stocks, while distillate inventories increased.
If the US Energy Information Administration (EIA) confirms the data, then it would be the fifth consecutive weekly fall, the longest since the beginning of 2018.
As most oil companies were involved in re-staffing facilities to resume production, over half of daily crude production in the Gulf of Mexico continued to be affected on Tuesday, Reuters reported.
According to the Bureau of Safety and Environmental Enforcement, 1.1 million barrels per day of oil, or 58% of the region’s total, and 1.4 billion cubic feet a day of natural gas output remained shut.
On Tuesday, oil prices declined on hopes for a return of Iranian crude to the global oil market after US President Donald Trump said that progress had been made with Tehran and that tensions could ease in the Middle East.
Iran later denied that it was willing to negotiate over its ballistic missile programme.
PVM analysts said: “It is hard to believe that either the United States or the Iranian stance would change drastically, therefore yesterday’s sell-off might turn out to be an excellent buying opportunity.
“Especially if this afternoon’s EIA (US crude) stock data will be more constructive than last night’s API report.”