(Bloomberg) — Oil rose in Asian trading after U.S. government data showed another large draw in gasoline stockpiles amid increasing demand.
Futures in New York are trading near $65 a barrel after snapping two days of losses on Wednesday. Gasoline inventories have declined more than 25 million barrels in the last two weeks, while a measure for consumption expanded last week to the highest level since November. Further price gains may have been tempered by another big increase in crude stockpiles.
The appetite for Iranian oil has grown, meanwhile, with China boosting its purchases even as other nations wait for the easing of U.S. sanctions. Imports have surged so much this month that port’s in Shandong province are seeing increased congestion, according to traders and analysts.
Oil is up more than 30% this year as the market tightens amid output cuts from OPEC+ members and as the outlook for demand improves with the rollout of Covid-19 vaccines. Saudi Arabia vowed to deter further attacks on its energy infrastructure after an assault on an export terminal Sunday pushed prices to the highest level since October 2018 the following day.
“Price action has consolidated over the last few sessions,” said Jeffrey Halley, an analyst at Oanda Asia Pacific. “The physical market is running a deficit at the moment and as long as that remains, any pullback in oil will be limited.”
U.S. gasoline stockpiles fell by almost 12 million barrels last week, according to the Energy Information Administration. Crude stockpiles rose by 13.8 million, taking gains over the past three weeks to almost 37 million following a cold blast that shuttered a number of refineries.
China’s imports of Iranian crude is seen climbing to the most in almost two years in March as the Persian Gulf nation heavily discounts supplies due to the American sanctions. Chinese buying may be a topic of discussion next week during a high-level in-person meeting between Beijing and Washington that’s scheduled to take place in Alaska.
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