Traders said USA crude was supported by Genscape data showing a draw of some 700,000 barrels last week at the Cushing, Oklahoma, delivery hub for US crude futures.
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USA crude jumped after the data release, rising by as much as 1.6 percent, or 71 cents, over the next 20 minutes. It has enjoyed straight gains in the last 2 trading sessions, following a consecutive 4 session slump.
Brent crude, the benchmark for more than half the world’s oil, was up 1.1 percent at $47.78 a barrel by 6:37 p.m. Singapore time.
The draw in crude inventory may boost markets going forward, especially as demand slips in the fall marked by heavy refinery maintenance season and the end of summer driving.
The country’s seen pumping 10.9 million barrels a day in 2016, and 11.3 million next year, Jonathan Kollek, the head of Eurasia at oil trader Trafigura Group, said at APPEC in Singapore on Wednesday. “That’s one of the reasons why the market fell below $45”.
NEW YORK, Sept 7 (Reuters) – Oil prices rose 1.5 percent on Wednesday as the market focused on the possibility that the world’s top producers would agree on an output freeze. Producers have pledged to discuss measures to help the market, but Saudi Arabia has said it sees no need to limit oil output and Russian Federation expressed doubt that a cap is needed.
Oil prices have dropped due to uncertainty over a proposal to freeze output, particularly after a meeting that was held in Doha in April this year among major producers to discuss the deal, which was a failure.
OPEC members will meet on the sidelines of the International Energy Forum (IEF), which groups producers and consumers, in Algeria on September 26-28, during which they are expected to discuss a possible output freeze.
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In a report on Wednesday, the EIA forecast that USA crude supply is going to be larger than expected due to technological improvements with production likely to hit a low of 8.5mn bpd this quarter with unchanged production next year. Rotman also added that, “We believe the overall directional trend is still downward pointing, so we would not be surprised to see WTI crude oil test its recent low area at $43”. “If OPEC freezes at these levels, these are record levels”, said Tariq Zahir, analyst at Tyche Capital Advisors. All comments are subject to editorial review.
