Oil jumps to six-week high on surprisingly big U.S. inventory draws
Oil prices jumped almost 2 percent to a six-week high on Wednesday after a U.S. report showed a bigger weekly draw than forecast in crude and gasoline stocks along with a surprise drop in distillate inventories, APA reports quoting Reuters.
The Energy Information Administration (EIA) said U.S. crude stocks fell 4.7 million barrels during the week ended July 14. ENERGYUSA, exceeding estimates for a 3.2 million draw in a Reuters poll.
Brent LCOc1 futures for September delivery settled up 86 cents, or 1.8 percent, at $49.70, while U.S. West Texas Intermediate crude CLc1 for August settled up 72 cents, or 1.6 percent, at $47.12 on its second to last day as the front month.
That is the highest close for both contracts since June 6.
"The report was more good news for the oil industry as inventories declined across the board for crude and products by over 10 million barrels," Andrew Lipow, president of Lipow Oil Associates in Houston, said.
EIA said distillate stocks decreased 2.1 million barrels and gasoline stocks declined 4.4 million barrels. Analysts polled by Reuters had forecast a 1.2 million barrel build in distillates and a 0.7 million barrel draw in gasoline.
U.S. distillates HOc1 and gasoline RBc1 futures both gained more than 2 percent, briefly boosting the products crack spread CL321-1=R, a measure of refinery margins, to its highest since November 2016.
The drawdown occurred even as EIA said U.S. production climbed to 9.43 million barrels per day (bpd), its highest since July 2015. Analysts said rising U.S. production has made it harder for OPEC and other producing nations to support prices with their own output cuts.
"The continued rise in U.S. crude oil production to a 2-year high ... increases pressure on OPEC to come up with some counteracting measures. Otherwise, the rebalancing of the oil market will remain painfully slow," said Carsten Fritsch, oil analyst at Commerzbank AG in Frankfurt, Germany.
Supplies from the Organization of the Petroleum Exporting Countries (OPEC) remain high. Rising output from member states Nigeria and Libya have cast doubt on efforts to reduce the crude glut.
The head of Libya's National Oil Corp said the country aims to produce 1.25 million bpd by the end of the year and 1.5 million bpd by the end of 2018.
Nigeria and Libya are exempt from a deal between OPEC and other producers, including Russia, to cut production by 1.8 million bpd.
A Russian energy source said the country is ready to keep working with OPEC to rebalance oil markets.
Related news releases
- 20.08.2017President Ilham Aliyev attended opening of Shamkir Automated Management and Control Center of “Azerishig” OJSC
- 20.08.2017President Ilham Aliyev launched Gadabay electrical substation
- 19.08.2017President Ilham Aliyev launches Chichakli Hydroelectric Power Station after major overhaul
- 18.08.2017Funds allocated for reconstruction of water infrastructure in Baku’s Khazar district
- 18.08.2017ENOC realizes another supply of crude oil to Iran despite US sanctions
- 17.08.2017South Caucasus Pipeline Expansion project now ‘96% complete’
- 17.08.2017BP says SCP daily average throughput was 21.4 million cubic metres of gas per day in 1H 2017
- 17.08.2017BP: About 141 mln barrels of oil exported from Sangachal terminal in 1H 2017
- 17.08.2017ACG delivers 1.8 billion cubic metres of associated gas to SOCAR in 1H 2017
- 17.08.2017BP: Total ACG production over 14 mln tons in 1H 2017
- 16.08.2017Gas transportation from Shah Deniz field to Georgia suspended
- 14.08.2017LUKOIL and SOCAR can jointly invest in Turkish companies
- 11.08.2017Azerbaijan’s revenues from energy export increase 3.4-fold
- 11.08.2017Azerbaijan’s revenues from natural gas export increase sixfold
- 11.08.2017Azerbaijan reduces crude oil export 40%
- 09.08.2017ENOC continues to supply crude oil to Iran despite sanctions
- 08.08.2017New US sanctions on Russia increase uncertainty on European gas markets - S&P
- 08.08.2017Turkmen President to discuss natural gas transportation in Baku
- 07.08.2017ENOC sends oil to Iran despite US sanctions
- 04.08.2017Oil prices rise on strong U.S. jobs data
- 04.08.2017President: Azerbaijan turned into a reliable country supplying gas to world
- 03.08.2017Azerbaijan submits data on July’s oil output to OPEC
- 03.08.2017Power substation launched in Azerbaijan’s Zagatala
- 02.08.2017Volume of Azerbaijani oil transported through Ceyhan port announced
- 02.08.2017BTC transported more than 337 million tonnes of oil so far
- 01.08.2017SOCAR announces volume of exported oil products
- 01.08.2017SOCAR announces sale price of crude oil for last month
- 01.08.2017SOCAR exports 12 million tonnes of oil through three ports this year
- 01.08.2017Azerbaijan sells energy worth $10M to Turkey this year
- 31.07.2017Oil near two-month high as producers set to meet again
- 28.07.2017Georgian official: Baku-Supsa pipeline to operate uninterruptedly
- 27.07.2017SOCAR imports 16,000 tonnes of aircraft fuel from Saudi Arabia
- 27.07.2017Oil jumps to near eight-week high after big draw in U.S. crude stocks
- 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
- 25.07.2017Oil extends gains as Saudi pledges export curbs
- 24.07.2017Country manager: TAP construction won’t have negative impact on environment
- 22.07.2017Oil dives 2 percent; consultant sees OPEC crude output rise in July
- 21.07.2017President Ilham Aliyev opens Pirallahi solar power plant
- 20.07.2017Azerbaijan’s investments in Turkey to reach $20B
- 20.07.2017SOCAR President: $8.5B invested in TANAP so far
- 20.07.2017Rovnag Abdullayev: 90% works copmleted in STAR refinery
- 18.07.2017Ischinger: Sanctions against Russia pose threat on European energy security
- 18.07.2017Import of certain types of gasoline to Azerbaijan exempted from duties
- 18.07.2017Azerbaijani President: "The Southern Gas Corridor is probably the largest infrastructure project in Europe"