Traders said that the main WTI price driver had been American Petroleum Institute data showing a 7.5 million barrel draw to 507.2 million barrels in USA crude inventories, the third weekly stock draw. Prices dropped 7 cents, or 0.2 per cent, to $45.88 a barrel on Tuesday.
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While the “numbers are supportive (to prices), there remain numerous hurdles to overcome in the short term to provide any significant uplift”, said Anthony Starkey of Platts Analytics.
Meanwhile, Brent’s premium to the WTI crude contract stood at $1.65 a barrel by 10:42AM ET (14:42GMT), compared to a gap of $2.44 by close of trade on Tuesday. At 2:00 p.m., Fed policymakers will announce their decision on interest rates. The likelihood of a December rate hike, however, has risen to 64%, according to CME Group.
USA gasoline futures settled up 2.5 percent at $1.3990 per gallon after data showed stocks of the motor fuel fell 3.2 million barrels nationwide, compared with analysts’ expectations for a 567,000-barrel drop. “The API surprise draw overnight is obviously leading to the question of whether we are going to see the same in the official inventory today”, CMC Markets strategist Jasper Lawler said.
The dollar weakened after the Federal Reserve left USA interest rates unchanged, which also buoyed prices for dollar-denominated crude.
In Norway, more than 300 oil service workers went on strike as wage talks broke down, hitting operations of five large subcontractors to the domestic oil and gas industry.
Oil traders continued to weigh prospects that major oil producing nations will freeze output to support the market when they meet next week.
OPEC and non-OPEC producers are expected to revive a production freeze deal when they meet in Algeria on September 26-28 after a similar initiative collaped in Doha in April because Iran refused to restrict its supplies.
Key crude asserted they will hold meeting in Algeria to discussion on global supply crisis and overproduction which is responsible for oil prices for two years.
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Iran is exporting 2.3 million to 2.4 million barrels a day of oil, and National Iranian Tanker Co.is seeking to regain its share of the oil-shipping market, the state-run company’s Commercial Director Nasrollah Sardashti said at the event in Fujairah.
