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Oil extends gains on bets for U.S. supply drop, receding Brexit fears

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Oil extends gains on bets for U.S. supply drop, receding Brexit fears

Oil prices pushed higher in European trade on Wednesday, extending overnight gains, amid speculation weekly supply data due later in the session will show U.S. crude inventories fell at a faster pace than expected last week.
The U.S. Energy Information Administration will release its weekly report on oil supplies at 14:30GMT, or 10:30AM ET, amid expectations for a drop of 2.4 million barrels.

Gasoline stockpiles are expected to rise by 58,000 barrels while stocks of distillates, which include heating oil and diesel, are forecast to increase by 14,000 barrels, according to analysts.

After markets closed Tuesday, the American Petroleum Institute, an industry group, said that U.S. oil inventories fell by 3.9 million barrels in the week ended June 24. Gasoline inventories declined by 42,000 barrels and distillate inventories fell by 83,000 barrels, the API said, according to sources.

Crude oil for August delivery on the New York Mercantile Exchange jumped 60 cents, or 1.25%, to trade at $48.45 a barrel by 07:53GMT, or 3:53AM ET.

A day earlier, New York-traded oil rallied $1.52, or 3.28%, as worries about the U.K.’s shock decision to leave the European Union abated, boosting appetite for riskier assets.

Elsewhere, on the ICE Futures Exchange in London, Brent oil for September delivery tacked on 51 cents, or 1.04%, to trade at $49.77 a barrel, after surging $1.49, or 3.12%, on Tuesday.

Oil got a further boost amid concerns over supply disruption in Norway, where about 7,500 workers on seven oil and gas fields could go on strike from Saturday if a new wage deal is not agreed before a Friday deadline.
The affected fields account for nearly 18% of Norway’s oil output, hitting production from the North Sea’s top producer.

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