Crude Oil Recovers From Early Slump To Close Notably Higher

(RTTNews) - After recovering from an initial move to the downside, the price of crude oil moved notably higher over the course of the trading session on Thursday.

Crude for July delivery jumped $1.61 or 1.4 percent to $116.87 a barrel after falling as low as $111.20 a barrel in early trading.

Oil prices initially came under pressure after the Financial Times reported Saudi Arabia was prepared to pump more oil to compensate for any Russian output loss because of Western sanctions.

OPEC and its oil-producing allies subsequently announced an agreement to increase production by 648,000 barrels per day in both July and August.

While the cartel has continued to slowly return the 10 million barrels per day it pulled from the market in April 2020, analysts suggested the latest decision does little to change the tightness of the market.

The turnaround by the price of crude oil also came as the Energy Information Administration released a report showing a much bigger than expected weekly decrease in U.S. crude oil inventories.

The report showed crude oil inventories slumped by 5.1 million barrels in the week ended May 27th compared to economist estimates for a decrease of about 1.4 million barrels.

The EIA also said gasoline inventories dipped by 0.7 million barrels last week, while distillate fuel inventories edged down by 0.5 million barrels.