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WTI is up 0.90% on Thursday as crude oil prices held early gains after inventories in the US fell more than expected. Nonetheless, signs of the demand recovery slowing down will limit the upside, according to strategists at ANZ Bank.

Key quotes

“EIA data showed stockpiles in the US were down 7.2mbbl last week, the biggest retreat since December. At Cushing, WTI’s main storage/pricing hub, stockpiles were down for the eighth consecutive week. However, it wasn’t all good news, with implied fuel demand falling.” 

“It wasn’t all good news, with implied fuel demand falling. New cases of COVID-19 continue to rise in the US, with 46,065 yesterday bringing the total to 2.66m. Arizona and California reported their biggest daily gains, while Florida worsened. This has seen the easing of restrictions halted in many states, with some reinstating constraints. New York extended its list of states from which visitors must quarantine on arrival.”

“The market was also comforted by reports that OPEC is maintaining its supply constraints successfully. Bloomberg data shows that the group cut its output by 1.93mb/d to 22.69mb/d in June. That’s its lowest level since May 1991. The overall compliance with the supply agreement was 100%, although the rates varied among members.”