New York, June 28 (Reuters) – Oil prices rose about 3% on Wednesday as US crude oil inventories exceeded expectations for the second consecutive week, offsetting concerns that further interest rate hikes may slow economic growth and reduce global oil demand.

Brent crude oil futures rose $1.77, or 2.5%, to close at $74.03 per barrel. West Texas Intermediate Crude Oil (WTI) rose $1.86, or 2.8%, to close at $69.56. Brent crude oil’s premium to WTI narrowed to the lowest level since June 9.

The Energy Information Administration (EIA) said that as of the week ended June 23, crude oil inventory had decreased by 9.6 million barrels, far exceeding the 1.8 million barrels predicted by analysts in the Reuters survey, and far higher than the 2.8 million barrels a year ago. It also exceeds the average level for the five years from 2018 to 2022.

Price Futures Group analyst Phil Flynn said, “Overall, very reliable data runs counter to those who have consistently claimed that the market is oversupplied. This report may be the basis for a bottoming out

Investors remain cautious that raising interest rates may slow economic growth and reduce oil demand.

If anyone wants to rain heavily on the bull market, it’s [Federal Reserve Chairman] Jerome Powell, “Flynn said

World leaders of major central banks have reiterated their belief that further tightening of policies is needed to curb inflation. Powell did not rule out the possibility of further interest rate hikes at successive Federal Reserve meetings, while Christine Lagarde, the president of the European Central Bank, confirmed the bank’s expectation of interest rate hikes in July, saying it was “possible”.

The 12-month spot premium of Brent crude oil and WTI (which indicates an increase in demand for immediate delivery) are both at their lowest levels since December 2022. Analysts at energy consulting firm Gelber and Associates say this indicates that “concerns about potential supply shortages are easing”.

Some analysts expect the market to tighten in the second half of the year, because OPEC+, the OPEC (OPEC), Russia and other allies continue to reduce production, and Saudi Arabia voluntarily reduced production in July.

In China, the world’s second largest oil consumer, the annual profits of industrial enterprises continued to decline by double digits in the first five months of this year due to weak demand squeezing profit margins, which enhanced people’s hope for providing more policy support for the faltering economic recovery after the COVID-19 epidemic

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