Oil edges higher after drop in stockpiles

Oil edged higher in early Asian trading after a surprise drop in US crude stockpiles aided the demand outlook, outweighing the prospect of a return of official oil exports from Iran.

Futures in New York climbed above $90 a barrel after rising 0.3 per cent Wednesday.

US crude inventories fell by about 4.8 million barrels last week, according to government data, compared with an expected increase in a Bloomberg survey. Further gains were capped by a flurry of diplomacy preceding the resumption of Iran nuclear talks in Vienna, suggesting sides are trying to close in on a long-sought agreement that could pave the way for more supply.

Oil has rallied over the past seven weeks to the highest level since 2014, putting $100 crude within reach and raising concerns about inflation. OPEC+ has struggled to meet its targeted output pledges as economies rapidly rebounded from the pandemic, leading to a significant tightening of the market.

Crude inventories at the key Cushing storage hub fell for the fifth week to the lowest level since November, according to data from the Energy Information Administration.

The four-week average for supplied oil products – a gauge for demand – climbed to a record last week.