By Sam Li and Trixie Yap
(Reuters) -Oil prices edged down as investors booked profits after a jump to a seven-week high during the prior session on a surprise drop in U.S. weekly crude inventories and concerns Ukraine’s attacks on Russia’s energy infrastructure could disrupt supplies.
Brent futures LCOc1 dropped 18 cents, or 0.26%, to $69.13 a barrel by 0013 GMT, while U.S. West Texas Intermediate (WTI) crude futures CLc1 dropped 20 cents, or 0.31%, to $64.79 a barrel.
Both benchmarks gained 2.5% in the previous session.
“After testing and bouncing from the bottom of its recent range earlier this week, crude oil has rebounded back towards the upper bound of its recent range. With this in mind, we are likely seeing some light profit taking this morning,” said Tony Sycamore, market analyst at IG.
Prices were supported after U.S. crude inventories fell by a surprise 607,000 barrels in the week ended September 19, the Energy Information Administration said on Wednesday.
The draw contrasted with analysts’ expectations for a 235,000-barrel build in a Reuters poll and was smaller than the 3.8 million-barrel draw that market sources said the American Petroleum Institute reported on Tuesday.
Oil prices were also supported by supply concerns stemming from the Russian war in Ukraine.
Ukraine has stepped up drone attacks on Russian energy infrastructure in recent weeks, targeting refineries and export terminals to reduce Moscow’s export revenues, and Russia is seeing shortages of certain fuel grades with possible export restrictions on fuel if needed.
Despite concerns over Russia’s supply disruptions, Haitong Securities said in a report that another key factor behind oil’s resilience was the lack of significant downward pressure from supply–demand fundamentals in recent weeks.
As the peak demand season gradually ends, expectations of mounting oversupply pressures have yet to be reflected in prices, Haitong Securities said in a report.
A J.P. Morgan report on Wednesday said year-to-date through September 23, global oil demand growth was tracking at 800,000 barrels per day versus an estimate of 830,000 bpd. The report said month-to-date global oil demand has averaged 104.4 million bpd, in line with the firm’s September estimate.
(Reporting by Sam Li and Trixie Yap; Editing by Jamie Freed)
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