Oil jumps to near eight-week high after big draw in U.S. crude stocks
Oil prices rose to near eight-week highs on Wednesday, with Brent crude futures above $50 a barrel, as a much steeper than expected decline in U.S. inventories encouraged hopes the global crude glut would recede, APA reports quoting Reuters.
Brent crude futures LCOc1 settled up 77 cents or 1.5 percent to $50.97 a barrel. U.S. West Texas Intermediate futures CLc1 rose 86 cents or 1.8 percent to $48.75 a barrel.
U.S. crude stocks fell last week as refineries hiked output and imports dropped, while gasoline stocks decreased and distillate inventories fell, the Energy Information Administration said.
Crude inventories fell 7.2 million barrels in the week ending July 21, far exceeding the 2.6 million barrel forecast. It was the fourth straight weekly decline, bolstering hopes that the long-oversupplied market was moving toward balance.
On Monday, Saudi Arabia said it would limit oil exports to 6.6 million barrels per day (bpd) in August, down nearly 1 million bpd from a year earlier.
"Today’s report has strengthened the bullish sentiment already prevailing in the market, although the longevity of the move remains in doubt," said Abhishek Kumar, Senior Energy Analyst at Interfax Energy’s Global Gas Analytics in London. "Nevertheless, the country’s crude and gasoline stockpiles remain above their five-year averages, which will cap price gains."
The drawdown was a combination of higher exports from the United States, a marginal decline in oil output and a rise in the refinery utilization rate, he said.
"The market has been tightening and the refinery margins are strong," said PetroMatrix managing director Olivier Jakob, adding the U.S. stock draw offered a boost to prices. "You add geopolitical risk premium for Venezuela, and you've got a strong market."
In Venezuela, an OPEC member producing about 2 million bpd of oil, President Nicolas Maduro's opponents launched a two-day national strike to push him to abandon a weekend election. The United States is considering financial sanctions to halt dollar payments for Venezuelan oil. [nL1N1KH0BN]
Nigerian output slipped this week as leaks forced Shell to shut a pipeline exporting some 180,000 bpd of oil. Nigeria, which has been exempted from OPEC-led production curbs, has agreed to cap or cut output when it stabilized at 1.8 million bpd.
But analysts said rallying oil prices could encourage more production, particularly from the United States.
Related news releases
- 20.10.2017EBRD approves loan for TANAP
- 20.10.2017Azerbaijan gets 43% decline in export of oil products
- 20.10.2017Azerbaijan gets rise in revenues from natural gas export
- 20.10.2017Azerbaijan gets 20% decline in revenues from crude oil export
- 20.10.2017Azerbaijan triples energy export
- 20.10.2017Minister: Output cut justifies itself, oil market found balance
- 19.10.2017Extractive Industries Transparency Commission held meeting
- 17.10.2017TAP to invest 800 million euros in Albania
- 17.10.2017Italy’s Edison to purchase Azerbaijani gas
- 16.10.2017TAP pipe deliveries complete
- 16.10.2017Azerbaijan gets 2.5% decline in heating power production
- 16.10.2017SOCAR transfers AZN 1B to state budget
- 14.10.2017Oil rallies nearly 2 percent on China import boost, U.S.-Iran tensions
- 13.10.2017Executive body on ensuring transparency in extractive industry changed in Azerbaijan
- 13.10.2017Azerbaijan increases oil transportation via main pipelines
- 13.10.2017Azerbaijan gets 8% decline in natural gas production
- 13.10.2017Azerbaijan increases gasoline production 5%, reduces diesel production 21%
- 13.10.2017President: Azerbaijani gas will play a major role in solution of issues of Bulgaria's energy security
- 12.10.2017Parviz Shahbazov appointed Azerbaijan’s new energy minister
- 12.10.2017Azerbaijan sees 5% decline in gas production
- 12.10.2017Azerbaijan sees 8% decline in oil output
- 12.10.2017SOCAR to export 1.5 million tonnes of oil via Baku-Novorossiysk pipeline next year
- 12.10.2017Expenditures of STAR Refinery in Turkey increase
- 12.10.2017Azerbaijan may export diesel to Iran
- 12.10.2017Turkmenistan to resume oil transportation via BTC, Kazakhstan holding negotiations
- 12.10.2017BP announces its investments in ACG and Shahdeniz
- 12.10.2017BP Regional President names factors to turn Azerbaijan into a regional energy hub
- 12.10.2017SOCAR Trading to supply liquid gas to Malta
- 12.10.2017SOCAR: ACG currently has more than 550 million tonnes of oil
- 12.10.2017Baku hosting international petroleum summit
- 10.10.2017Board of Directors highly evaluates Nobel Oil Services’ performance
- 09.10.2017Ancient tombs unearthed during TANAP construction
- 06.10.2017Minister: TANAP to be completed earlier than planned
- 06.10.2017Gazprom agrees to open office in Azerbaijan
- 05.10.2017President gives SOCAR instruction to provide gasifying of Lahij settlement
- 05.10.2017Azerbaijan reduces gas production nearly 17%
- 05.10.2017SOCAR reduces gas production nearly 6%
- 05.10.2017Azerbaijan reduces oil production by 9%
- 05.10.2017SOCAR reduces oil production by 1.5%
- 05.10.2017Georgia increases fuel import from Azerbaijan
- 27.07.2017SOCAR imports 16,000 tonnes of aircraft fuel from Saudi Arabia
- 28.07.2017Georgian official: Baku-Supsa pipeline to operate uninterruptedly
- 31.07.2017Oil near two-month high as producers set to meet again
- 25.07.2017Azerbaijan increases gas export to Turkey
- 25.07.2017BP: TANAP is significant project for us
- 25.07.2017Anglo Asian Mining earns $19.4M from sale of gold