Oil edges higher on inventory drawdowns, Brent tops $75 a barrel

Oil prices rose on Thursday as crude stockpiles in the United States, the world's top oil consumer, fell to their lowest since January 2020, with Brent crude oil prices pushing back past $75 a barrel.

Brent crude oil futures were up $0.17, or 0.2 %, at $74.91 a barrel by 1049 GMT, having traded as high as $75.55. US West Texas Intermediate (WTI) crude oil futures were also up $0.17, or 0.2 %, to $72.56 a barrel.

Brent topped $75 a barrel for the first time in more than two years in June, but fell back sharply this month on fears about the rapid spread of the Delta variant of coronavirus and a compromise deal by leading oil producers to increase supply.

"The (oil inventory) falls suggest the rise in cases of Covid-19's Delta variant is having little impact on mobility," ANZ analysts said in a note on Thursday.

Crude inventories fell by 4.1 million barrels in the week to July 23, the US Energy Information Administration (EIA) said, helped by lower imports and a decline in weekly production.

The US economic recovery is still on track despite the rise in coronavirus infections, the Federal Reserve said on Wednesday in a policy statement that flagged ongoing talks around the eventual withdrawal of monetary policy support.  

"While the risk to the demand outlook could increase due to governments across Europe reducing permission for public gatherings, we note that markets have already undergone several rounds of mobility restrictions... yet, the global recovery was not significantly derailed," analysts from Citi said in a note.

Also supporting prices was a statement from Iran blaming the United States for a pause in nuclear talks, which could mean a delay in a return of Iranian barrels to the market.