Brent gains following a draw in US crude stocks

The front-month ICE Brent contract has gained by $0.69/bbl on the day, to trade at $66.58/bbl at 09.00 GMT.

IMAGE: Oil storage tanks. Getty Images

Upward pressure:

Brent crude’s price has gained following a larger-than-expected draw in US crude stocks.

US crude oil inventories have decreased by 2.4 million bbls in the week ending 15 August, according to estimates from the American Petroleum Institute (API) cited by Trading Economics.

Market analysts had projected a smaller drop of 1.2 million bbls in the week.

A drop in US crude stocks typically indicates higher demand and can lend some support to Brent's price.

Downward pressure:

Easing geopolitical risks have put some downward pressure on Brent this week, after US President Donald Trump stated that a ceasefire deal between Russia and Ukraine could be reached soon.

The news has erased concerns of stricter sanctions against Russia, according to market analysts.

“President Trump continues to try using diplomatic avenues to reach a ceasefire agreement between Russia and Ukraine, easing risks of sanctions on Russia which would impact supply,” said ANZ Bank’s senior commodity strategist Daniel Hynes.

Notably, no concrete resolution on the Ukraine conflict was reached at last week’s Alaska summit between Trump and Russian counterpart Vladimir Putin.

By Aparupa Mazumder

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