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Oil Extends Gains On Falling Inventories

Oil prices rose on Wednesday, with Brent gaining for a fifth consecutive session on signs of falling stockpiles and hopes for a recovery in demand as the pandemic subsides.

Brent crude futures for August delivery were up 0.3 percent at $74.23 per barrel, after having hit the highest since April 2019 at $74.72 earlier in the day.

U.S. crude futures for July settlement were up 0.3 percent at $72.33, after having reached the highest since October 2018 earlier.

The American Petroleum Institute (API) on Tuesday reported a draw in crude oil inventories of 8.5 million barrels in the week ended June 11, while analysts had predicted a much smaller draw of 3.3 million barrels for the week. The weekly report by the EIA will be out later in the day.

Fitch Ratings has increased its 2021 and 2022 oil price assumptions for the Brent and West Texas Intermediate (WTI) benchmarks, citing a deficit in the market caused by a recovery in demand, and constrained supply from OPEC+ countries and heightened U.S. capital discipline.

The recovery in oil demand is expected to gain momentum in the second half if vaccination rollouts are successful and pandemic-related restrictions are eased.

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