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OIl Hits new High on Demand Rise, Falling Inventories

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Oil gained for a fifth day on Wednesday, climbing towards 75 a barrel to its highest since April 2019, supported by a recovery in demand from the pandemic and a drop in U.S. crude inventories.

The American Petroleum Institute reported U.S. crude inventories fell 8.5 million barrels, two market sources said, more than analysts forecast. Official Energy Information Administration figures are out at 1430 GMT.

Brent crude was up 21 cents, or 0.3, at 74.20 a barrel by 1000 GMT, and earlier reached 74.73, the highest since April 2019. U.S. crude gained 18 cents, or 0.3, to 72.30 and hit 72.83, the highest since October 2018.

Demand growth is outpacing supply and will continue to do so over the coming months, said Stephen Brennock of oil broker PVM.

Brent has risen 44 this year, supported by supply cuts led by the Organization of the Petroleum Exporting Countries and allies, known as OPEC, and a demand recovery expected to gather pace in the second half.

Despite some easing of last years record output cuts made when the pandemic took hold, OPEC is still withholding millions of barrels of daily supply from the market.

Even nonenergy traders are placing bets that oil prices will continue to rise, said Edward Moya, senior market analyst at brokerage OANDA.

Executives from major oil traders said on Tuesday they expected prices to remain above 70 and demand to return to prepandemic levels in the second half of 2022.

At the same time, the prospect of an imminent rise in…

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