The EIA’s reported 5-million-barrel drawdown was much better than the 3.2 million barrel build that analysts had forecast.
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Analysts said speculative positions created by traders after crude prices extended gains in Asia following a sizeable drop in USA stockpiles, the first decline in seven weeks, indicating stronger demand in the world’s top oil consumer. Oil has bounds from a low of about $26 a barrel on February 11 to over $40 late last month.
US output, meanwhile, fell 14,000 barrels last week to 9.008 million barrels per day, dipping to its lowest level in 17 months. At the Multi Commodity Exchange, crude for delivery in April gained Rs 81, or 3.40 per cent, to Rs 2,461 per barrel, with a business turnover of 7,785 lots.
Brent futures were at $39.51 at 1258 GMT, down 33 cents from Wednesday’s close.
The company is an independent oil and gas company engaged in exploration, development, acquisition and production of crude oil, NGLs and natural gas.
Oil traders and investors consider that the main reason why the crude inventories dropped to a large extent was because of lower imports and a delayed restart from Trans Canada Corp’s Keystone pipeline, which has the potential to pump 590,000 barrels per day.
International Brent futures were $1.85 higher at $41.28 and were on track for a weekly gain of more than 6.5 per cent. This will not be an official OPEC (Organization of the Petroleum Exporting Countries) meeting because both OPEC and non-OPEC countries are going to be involved and will discuss possible solutions for the problem. The proposed production freeze provided some temporary relief but the market is still on edge over worries the freeze may not materialize because two major heavyweights – Iran and Saudi Arabia – remain at odds over whether to participate in the accord. This is driven by a few notable weaknesses, which TheStreet Ratings believes should have a greater impact than any strengths, and could make it more hard for investors to achieve positive results compared to most of the stocks it covers. Russian Federation is looking to expand its oil exports to Europe over the coming months despite its plan of freezing production.
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Initial optimism that key Opec and non-Opec members would strike a deal to curtail global production helped propel prices to the highest level since early December, but Iran remains a key stumbling block to any formal agreement on reducing production, according to market watchers.
