Oil futures prices resumed their rise at the beginning of trading today, Wednesday, after their decline yesterday, against the backdrop of a significant decline in US inventories.
This comes at a time when the People’s Bank (the central bank) of China injected more cash into the banking system to allay concerns about the repercussions of the possible collapse of the giant real estate developer Evergrande.
The price of West Texas Intermediate crude, the benchmark for US oil, rose 1.4 percent to exceed $71 a barrel, at a time when a periodic report issued by the American Petroleum Institute yesterday showed a decline in crude oil stocks in the United States by more than 6 million barrels last week.
Official US Energy Information Administration data on US inventories is expected later in the day, according to Bloomberg News.
The price of West Texas crude on the New York Mercantile Exchange rose this morning by 1.3 percent to $71.43 a barrel for November delivery.
The price of Brent crude, the benchmark for global markets, rose by 1.2% to $75.25 a barrel for November delivery.
Investors in various financial assets continue to be affected by the fallout from the debt-laden Evergrande and the threat of a broader market shock in the long term.
“The problems of the Evergrande threaten the outlook for the world’s second largest economy and make some investors question the outlook for growth in China and whether it is safe to invest there,” said Edward Moya, chief market analyst at OANDA.
While this view of the state of the Chinese economy pressures the markets, the US Federal Reserve is also expected to start tightening monetary policy, which is likely to make investors more cautious about riskier assets like oil.