Oil prices soared more than four per cent on Thursday after US inventory data showed a surprisingly large drawdown in crude stocks, driven by fewer imports into the US Gulf Coast due to Tropical Storm Hermine last week.
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Gasoline stocks fell 2.3 million barrels, compared with expectations for a 171,000-barrel decline, the API data showed.
As of 13:30 GMT, London Brent futures for November delivery climbed 0.34% to trade at $47.43 a barrel.
USA crude was up $1.74 at $47.24 per barrel, a 3.82 percent gain.
Additionally, the Saudi Energy Minister Khalid al-Falih said there was no need for an output freeze at this moment, as crude oil prices were bound to go up with the current improvement of the market, undermining remaining hopes of any joint action.
Iran raised production by 60, 000 barrels a day to 3.62 million as it continues its return to global markets after the end of worldwide sanctions in January.
Oil prices hit a one-week high on Monday after Russian Federation and Saudi Arabia agreed to cooperate on stabilizing the oil market, but they have since fallen due to the mounting uncertainty over a deal.
“The market missed the imports but I think the price increase is temporary as opposed to a new uptrend”, said Dominick Chirichella, senior partner at Energy Management Institute in NY.
The rising oil production preceded a historic agreement to stabilise oil prices signed by Russian Federation and Saudi Arabia on September 5 on the sidelines of the G20 summit in the Chinese city of Hangzhou.
USA crude oil refinery inputs averaged over 16.9m barrels per day during the week ending 2 September, 315,000 barrels per day more than the previous week’s average. This came on the back of a statement by Opec that members of the 14-country oil producers’ group would meet for a discussion at a conference in Algeria at the end of September.
On Tuesday Iranian President Hassan Rouhani said his country is committed to help stabilise the oil market after meeting OPEC chief Mohammad Sanusi Barkindo.
The price for Brent crude oil moved lower by 0.75 percent to start the trading day in NY at $46.48 per barrel.
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“It would appear the price spike on Monday was used as an opportunity for those who believe there will be no agreement on freezing output at this month’s unofficial OPEC meeting to sell oil futures”.
