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Oil prices rose on Wednesday before the release of data on US oil inventories, as tight supplies and increased demand for fuel supported crude futures contracts, while major Chinese cities eased restrictions imposed to contain the Covid-19 pandemic.
Brent crude futures for August rose 22 cents, or 2 percent, to $120.79 a barrel by 0012 GMT, after closing at their highest level since May 31 on Tuesday.
US West Texas Intermediate crude contracts for July were at $119.65 a barrel, up 24 cents, or 0.2 percent, after reaching their highest settlement since March 8 on Tuesday.
Analysts polled by Reuters expect another drop in US crude stocks in last week’s data, although gasoline and distillate stocks may be higher.
However, figures from the American Petroleum Institute showed that inventories of crude and oil products in the United States rose last week.
Global supplies of crude and oil products remain tight, boosting Asian refiners’ profit margins that rely on diesel to record levels, as Western sanctions hamper exports from major producers in Russia.
The chief executive of global commodity trading firm Trafigura said oil prices could soon reach $150 a barrel and rise further this year, with demand likely collapsing by the end of the year.
Most refineries globally are already operating at near capacity to meet increased demand after recovering from the pandemic and to find a replacement for lost Russian supplies.
