NEW YORK, Aug 7 (Reuters) – Oil prices gained more than 2% on Wednesday, bouncing back from multi-month lows, after data showed a bigger-than-expected draw in U.S. crude stockpiles, even as worries about weak oil demand in China persisted.
Brent crude futures settled up $1.85, or 2.42%, at $78.33 a barrel. U.S. West Texas Intermediate crude gained $2.03, or 2.77%, to $75.23.
U.S. crude stocks fell for a sixth week in a row, dropping by 3.7 million barrels to 429.3 million barrels last week, government data showed, more than analysts’ expectations in a Reuters poll for a 700,000-barrel draw.
Tensions in the Middle East continued to stoke supply concerns.
The Middle East is bracing for a possible new wave of attacks by Iran and its allies following last week’s killing of senior members of militant groups Hamas and Hezbollah, with concern rising that the conflict in Gaza is turning into a wider Middle East war.
Iran-aligned Houthi militants on Wednesday targeted a container ship in the Red Sea and two U.S. destroyers in the adjacent Gulf of Aden. Attacks on vessels passing through the region have forced tankers to choose longer alternate routes.
“Any escalation of the conflict in the Middle East could see a greater risk of disruptions to supplies from the region,” ANZ analyst Daniel Hynes said.
Supporting the bearish demand view, Chinese trade data showed that July daily crude oil imports fell to the lowest level since September 2022. China is the world’s largest crude importer.
Energy News Beat