Oil closes 2% higher after sharp decline in US inventories

Oil drilling rigs

Oil prices rose for the third day in a row today, May 24, after the US Energy Information Administration (EIA) report on crude inventories and ahead of OPEC+ meeting next month.

The EIA data showed that oil inventories in the US fell by 12.5 million barrels in the week ended May 19, with gasoline stocks falling by 2.1 million barrels.

UBS expects higher demand for gasoline in the US this summer, with average prices expected to be lower than last year.

“The absence of a recession would likely lead to higher oil and commodity prices as well as higher rates, to which equities would likely react poorly,” Goldman Sachs analysts wrote in a note.

Meanwhile, concerns continue about the US federal government running out of money, amid disagreements between the White House and Congress that may push the country to default on debt repayment by the first of next June.

International benchmark Brent crude rose nearly 2%, or $1.52, to close at $78.36 a barrel. WTI crude rose nearly 2%, or $1.43, to record $74.34 a barrel.