Crude oil futures rose on Wednesday (May 8), recovering from a decline early in the session as crude inventories in the US fell.

Oil prices found support after US commercial crude inventories fell by 1.4 million barrels in the first week of May, according to official data from the US Energy Information Administration (EIA). The drop was a surprise compared to industry data that showed inventories increased by 509,000 barrels.

Oil prices have been under pressure recently due to rising inventories, with stocks in the US rising sharply in the last week of April.

“Oil market indicators have become weaker in recent weeks, and prices have fallen from recent peaks,” Morgan Stanley analysts noted.

At the end of the trading session on May 8, the WTI oil contract increased 61 cents (equivalent to 0.78%) to 78.99 USD/barrel. Brent oil contract added 42 cents (equivalent to 0.51%) to 83.58 USD/barrel.

Oil prices have dropped more than 7% since reaching a peak in April, when investors raised oil prices due to concerns that Iran and Israel would go to war. Since then, investors have largely sold the war premium, with Morgan Stanley removing a $4-a-barrel risk from its oil price forecast this year.

However, the summer oil demand outlook looks positive and OPEC+ is likely to extend production cuts until the end of the year. This will support a deficit of 2 million barrels/day in the third quarter and Brent oil prices at $90/barrel during the summer.

The Organization of the Petroleum Exporting Countries (OPEC) and its allies, including Russia, will meet on June 1 to discuss their production policies. Russian Deputy Prime Minister Alexander Novak on May 7 said there is currently no discussion within OPEC+ about increasing oil production.

In the Middle East, CIA Director William Burns will travel to Israel to discuss the latest ceasefire negotiations in Gaza, NBC News reported.

Source: Vietstock