On Wednesday oil futures were higher after losing almost 4% Tuesday, as traders awaited a U.S. government report which may indicate a third straight weekly decline in crude inventories. Possible escalation off the coast of Yemen also impacted oil prices.
On the New York Mercantile Exchange, July crude traded at $58.69 a barrel, up 70 cents, or 1.2%. Prices had dropped 3.7% on Tuesday on the back of a stronger U.S. dollar.
On London's ICE Futures exchange, July Brent crude rose 87 cents, or 1.4%, to $64.89 a barrel.
A day earlier, the American Petroleum Institute registered
a 5.2 million-barrel decline in U.S. crude inventories for the week
ended May 15.
Markets now await a more definitive informative due shortly.
“U.S. crude stocks have fallen the last two reporting periods,
shedding a total of six million barrels from stocks. Another week’s
decline could confirm that the seasonal drawdown has begun early, though
crude stocks remain at record-high levels,” Platts said. Analysts polled by it now forecast a dip of two million barrels.
Earlier, Iranian ship linked up in the Gulf of Aden off Yemen’s coast with an Iranian vessel believed to be carrying humanitarian aid for civilians in Yemen. The Iran Shahed’s captain had said the ship was due to enter the Bab al-Mandeb strait linking the Gulf of Aden to the Red Sea, bypassing Djibouti on the Horn of Africa and heading for the Yemeni port of Hodaida.
Iran will allow the United Nations to inspect a Yemen-bound aid ship at the regional U.N. hub in Djibouti, Tehran’s deputy foreign minister was quoted as saying on Wednesday, offering a chance to avert a showdown with Saudi-led forces, says Al Arabia News.
Iran supports the dominant Houthi militia in Yemen’s civil war while Saudi Arabia, Tehran’s regional arch-rival, considers the Houthis to be dangerous and is leading air strikes on them to try to roll back their advances and reinstate Yemen’s exiled president.
