Oil inventories on the decline in USA, prices rise

Light, sweet crude for July delivery rose by 4%, to US$71.51 a barrel on the Nymex, while Brent crude on the ICE futures exchange rose by 3.2% to US$71.74 a barrel. Signs that oil inventories at Cushing may be on the decline have propped up crude oil prices amid optimistic investor outlook. Investors are focused on outlook for global economic growth that is still strong. A day ago, they have sold out of riskier markets amid fears that the European Union's financial system was threatened by members' high debt levels. Oil inventories at Cushing dropped by 300,000 barrels in the week ended May 21, the first drop at the storage hub since March. Inventories had begun to approach storage limits in recent weeks at Cushing and traders became uncertain whether there would be space for more barrels, creating a strong incentive to sell futures contracts for next-month delivery.
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