By Georgina McCartney
HOUSTON (Reuters) -Oil prices edged higher on Wednesday after a jump in U.S. refining activity caused a bigger-than-expected drop in gasoline and crude inventories last week, but gains were limited due to minimal supply disruptions from Hurricane Beryl.
futures closed 42 cents higher, or 0.5%, at $85.08 a barrel. U.S. West Texas Intermediate (WTI) crude rose 69 cents, or 0.85%, to $82.10 a barrel.
WTI rose as much as $1 in the session after the U.S. Energy Information Administration reported that inventories fell by 3.4 million barrels to 445.1 million barrels in the week ended July 5, exceeding analyst expectations in a poll by Reuters of 1.3 million barrels. draw barrel.
Gasoline inventories fell by 2 million barrels to 229.7 million barrels, much larger than the 600,000 barrel drawdown that analysts had expected during the U.S. Fourth of July holiday week.
“More than anything else, the EIA data seems to be the driving force for higher prices right now,” said Phil Flynn, analyst at Price Futures Group.
Both crude oil futures contracts had finished lower in the previous three sessions on signs that the Texas energy industry emerged relatively unscathed from Hurricane Beryl.
Oil and gas companies resumed some activities on Tuesday. On Wednesday morning, the Port of Houston said it had returned to normal start times for operations at its eight public terminals.
Refineries and offshore production facilities experienced limited storm damage and have largely returned to normal operations, easing concerns about supply disruption.
Federal Reserve Chairman Jerome Powell said he was not yet ready to declare inflation reports but felt the US remained on track for stable prices and persistently low unemployment.
Investors are betting on interest rate cuts in September, which could boost economic growth and oil demand.
Geopolitical risks had little impact on prices, analysts said. Investors were somewhat fatigued by discussions about a Gaza ceasefire and the war in Ukraine, said Tim Snyder, an economist at Matador Economics.
“We see news stories that have little impact on the market, which means the market is ignoring them,” he added.
In the Middle East, Hezbollah chief Sayyed Hassan Nasrallah said that if Hamas reached a Gaza ceasefire deal with Israel, Hezbollah would halt its operations without the need for separate talks. The group began shooting at Israeli targets on the border in support of the Palestinians after ally Hamas launched the attack on Israel on October 7 that sparked the war in Gaza.
