Oil prices drifted higher on Wednesday, anticipating a report of low U.S. oil stocks, while expectations of solid demand in the upcoming driving season also lent support.

Brent crude futures for August were up 40 cents, or 0.3%, at $120.97 a barrel at 0649 GMT after closing on Tuesday at the highest since May 31.

U.S. West Texas Intermediate crude for July was at $120.01 a barrel, up 60 cents, or 0.5%, after reaching its highest settlement since March 8 in the previous session.Advertisement · Scroll to continue

Analysts polled by Reuters expect data for last week to show another drawdown of U.S. crude inventories, although gasoline and distillates stocks could edge higher.

“The oil market is expected to remain tight as the supply side will continue to tell a story of low inventories. Crude oil inventories will likely post more draws as driving season and vacationing heats up,” OANDA analyst Edward Moya said in a note.Advertisement · Scroll to continue

However, figures from the American Petroleum Institute showed that U.S. crude and oil products inventories rose last week.

The U.S. Energy Information Administration (EIA) will report last week’s stock levels at 10:30 a.m. EDT (1430 GMT) on Wednesday.

The World Bank on Tuesday slashed its global growth forecast for 2022 by nearly a third, warning that Russia’s invasion of Ukraine had compounded damage from the COVID-19 pandemic, and that many countries now faced recession.

Source: Reuters