WASHINGTON (dpa-AFX) - Crude oil extended its recovery on Thursday amid the ongoing Israel-Iran ceasefire and reports suggesting an increase in fuel demand in the US as the summer travel season approaches.
WTI Crude Oil for August delivery closed up by $0.32 to settle at $65.24 per barrel today.
August Brent Crude was last seen trading down by $0.14 to $67.54 per barrel today.
Concerns about increased output by OPEC+ countries was balanced by the fifth straight weekly drawdown on US crude oil inventories 11% below the five-year average.
Yesterday, data released by the EIA showed that oil inventories in the US shrank 5.8 million barrels, more than the expected 1.2 million barrel draw. Gasoline stocks fell by 2.1 million barrels.
With the onset of the travel-rich summer season, projections from the American Automobile Association yesterday revealed that demand in the US could pick up more than expected.
The truce between Israel and Iran brought on by the intervention of the US President Donald Trump is still holding with no news of any violations from either side. Trump has also stated that China can continue to buy oil from Iran, indicating his soft stance on Iran following the truce.
Oil and energy traders felt relieved as the risk of disruption to the Strait of Hormuz, through which 21 million barrels of oil (20% of global oil trade) pass each day, now stands abated.
As US and Iran are scheduled to negotiate next week on a nuclear deal, speculation is high that the US is planning to lift sanctions on Iran sooner.
The dollar index continued its decline on Thursday, supporting dollar-denominated commodities.
Oil traders now turn their focus to the July 6th OPEC+ meeting as the countries are planning to increase production.
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