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  • WTI tests a fresh high for the day, the highest in days was $41.61 on 23rd June. 
  • OIl prices are 1% higher on the day despite the crude oil inventories.

WTI is on the bid, testing fresh highs for the session to $41.07 having climbed form a low of $0.33 on the day so far. 

We are now over 1% higher on the day despite the crude oil inventories in the United States swelling by 5.7 million barrels in the week to July 3, information that was provided by the Energy Information Administration. In the week prior, the EIA had reported a significant inventory draw of 7.2 million barrels.

Gasoline inventories drew down despite a likely drop in automobility pertaining to the waves of fresh coronavirus cases during what is driving seasons 2020. 

Analysts had been looking for an inventory decline of 3.114 million barrels for crude oil in the period.

The American Petroleum Institute had reported a crude build the day prior, to the tune of 2.048 million barrels.

Economic recovery optimism keeps oil elevated

Overall, the price of oil has been resistant to coronavirus news in the $40s on the back of OPEC’s production cuts and economic recovery optimism. 

“After months of extremely deep market-driven and OPEC+ supply cuts, market expectations are starting to shift toward slight increases in shale output and tapering of the OPEC production cuts,”

analysts at TD Securities explained. 

At the same time, concerns continue to linger around the recovery in demand amid accelerating contagion in the US, while headlines from China suggest that, after a buying frenzy, weak refiner margins could see teapot refiners reduce throughput by roughly 2m bpd.