Oil gains after big United States crude stock draw Oil prices rose more than 1.5 per cent on Thursday after USA industry data showed a large drawdown in crude stocks, reflecting the impact of an Atlantic storm. London Brent crude for November delivery had climbed 76 cents to $48.74 a barrel by 0126 GMT, after settling up 72 cents on Wednesday. Other products, including gasoline, also rallied. Gasoline stocks fell 2.3 million barrels, compared with expectations for a 171,000-barrel decline, the API data showed.
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Crude stocks have been at record highs in the last two years, thanks in part to the US shale oil boom that boosted USA production.
“Last month, the International Energy Agency said that global crude supplies were outstripping demand”.
Before the EIA report, benchmark West Texas Intermediate (WTI) crude for October delivery traded up about 1.4% at around $46.15 a barrel and zoomed to around $47.15 shortly after the report’s release. Tropical Storm Hermine moved into the Gulf of Mexico on August 28, disrupting shipping and output before moving northeast.
Having surged on Thursday following a surprise decline in U.S. inventory levels, investors chose to lock in profits in the Asian and early European sessions, before a resurgent greenback sent oil prices plummeting.
“Implementation remains highly questionable and current OPEC production already approaches levels we had not anticipated until 2018”, Macquarie Research analysts said in a note.
Gasoline inventories also fell further than the API report had predicted.
Data released on Thursday by the General Administration of Customs reported that China’s oil imports rose to 32.85 million tons in August, which is equivalent to 7.8 million barrels a day.
The EIA report for the week ending September 2 showed a drop in domestic supplies of 14.5 million barrels, the largest tumble since 1999.
While the market traded fairly thin on Friday, analysts and traders continued to debate how effective a deal would be to limit supply when OPEC and non-OPEC producers meet informally in Algeria on Sept.26-28.
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The market has been fixated in recent weeks by an upcoming meeting of OPEC and non-cartel member Russian Federation to discuss ways of tackling a global supply glut that has hampered prices for more than two years.
