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(Prices updated, analysts comment added, paragraphs 5-6)
By Paul Karsten and Nia Williams
July 4 (Reuters) – Brent crude prices rose to their highest since April on Thursday, holding above $87, even after data from the previous day showed U.S. stockpiles fell.
Brent crude futures rose 21 cents, or 0.2%, to $87.55 a barrel by 1815 GMT. US West Texas Intermediate (WTI) crude futures rose 28 cents to $84.15 a barrel, having eased for the US Independence Day holiday.
In the previous session, Brent rose 1.3% to close at $87.34, its highest close since April 30. Meanwhile, WTI closed at an 11-week high of $83.88.
The gains came after US crude oil inventories fell more than expected. The US Energy Information Administration (EIA) reported a drop of 12.2 million barrels. Analysts polled by Reuters had expected a drop of 680,000 barrels.
RBN Energy analyst Martin King said traders were also keeping an eye on the war in Gaza and elections in France and the United Kingdom.
“Trading is quiet and people are keeping an eye on the physical markets and the geopolitical situation,” King said.
Earlier, oil prices fell as much as 83 cents, but the decline was not expected to last long given the dollar’s weakness and brighter outlook for US fuel demand following the EIA data, PVM analyst Tamas Varga said.
However, German industrial orders unexpectedly fell in May, suggesting a recovery in Europe’s largest economy is still a ways off.
Demand concerns were fueled by US data on Wednesday that showed the number of first-time applications for unemployment benefits in the US rose last week, while the number of unemployed also increased.
Conversely, weak economic data could increase the likelihood of a rate cut by the US Federal Reserve, which could be supportive for oil markets, analysts said.
Russian oil producers Rosneft and Lukoil will sharply cut oil exports from the Black Sea port of Novorossiysk in July, according to two sources familiar with loading plans, Reuters reported on Thursday.
Meanwhile, Saudi Arabia’s Saudi Aramco cut the price of its key Arab Light crude sold to Asia in August to $1.80 a barrel above the Oman/Dubai average.
The potential price cuts for Asia, which accounts for about 80% of Saudi Arabia’s oil exports, underscore the pressure facing OPEC producers as non-OPEC supplies continue to rise while the global economy faces headwinds.
Swiss bank UBS expects Brent crude prices to reach $90 a barrel this quarter, citing OPEC production cuts and an expected drop in oil inventories in a note to clients. (Reporting by Nia Williams in British Columbia, Robert Harvey and Paul Karsten in London, Arunima Kumar in Bengaluru, Katya Golubkova in Tokyo and Trixie Yap in Singapore; Editing by David Goodman, Emelia Sithole-Matarise and Matthew Lewis)
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