Crude output fell to 8.8 million barrels a day last week, the lowest since September 2014, while stockpiles fell 3.41 million barrels, the US Energy Information Administration said yesterday.
Advertisement
“The report has been quickly viewed as bullish with the crude draw just about exactly opposite to what API had: a 3.4 million barrel build”, said Dominick Chirichella, senior partner at the Energy Management Institute in NY, referring to the American Petroleum Institute data released late on Tuesday.
The EIA reported a decrease of 3.41 million barrels in the USA inventories during the week ended May 6 in its weekly crude oil report released at 10:30 AM EDT today.
International Brent crude futures were up 47 cents and traded at $44.10 per barrel, while the U.S. crude futures increased 21 cents at $43.65, Reuters reported.
New York’s West Texas Intermediate for delivery in June won 42 cents to stand at $46.65 a barrel, after soaring the previous day to its highest closing level since November 2015.
Prices strengthened after supply from Canada choked as wildfires at oil-sands and militant attacks in Nigeria’s oil facilities disturbed volumes.
Oil prices fell Wednesday after an industry group reported a higher-than-expected increase in USA crude stockpiles, extending recent volatility on the market.
Investors are looking forward to the United States crude oil inventories data released by the U.S. Energy Information Administration.
Traders said the dips were largely a result of profit-taking following intraday Brent price rises of up to $2.95 the previous day when U.S. government data surprised with a drop in crude inventories.
In a sign of a fight for market share, Iran has set its June official selling prices (OSPs) for heavier crude grades it sells to Asia at the biggest discounts to Saudi and Iraqi oil since 2007-2008.
Though most of the oil plants were not threatened by the fire, many oil workers were forced to flee as the city of Fort McMurray was evacuated.
Crude supply outages in Canada, Nigeria and elsewhere boosted prices.
Energy advisory group the IEA forecast that the stubborn oil glut will “shrink dramatically” this year, following wildfires that have disrupted Canada’s output and on buoyant Indian demand, analysts said.
Experts are saying a $45 to $50 Brent represents a balanced market, and analysts warned that the recent rise in oil prices wouldn’t last and market conditions remained weak due to an ongoing production glut.
Advertisement
The growth in global oil inventories is expected to slow in response to stronger growth in world oil demand, with inventories now expected to be drawn down during the second half of next year.
