Further fall in US crude and petrol inventories ease concerns
Brent tops $50 a barrel for first time in six weeks
Oil climbed above US$50 a barrel in London for the first time in six weeks after further declines in US crude and gasoline inventories eased concerns over a global glut.
Brent advanced as much as 0.7 percent. US crude inventories slipped 4.73 million barrels last week, the Energy Information Administration (EIA) reported Wednesday. Gasoline stockpiles dropped by 4.45 million barrels, the most since March.
Oil had traded below $50 since the start of June amid concerns rising global supply will offset curbs by Opec and its partners. Opec and non-member countries will meet later this month in St Petersburg to help monitor compliance with the output deal.
“This is a perfect demonstration that the oil market rebalancing process is actually happening,” Jan Edelmann, an analyst at HSH Nordbank AG in Hamburg, said of the inventory declines.
Brent for September settlement traded at $50.03 a barrel, up 33 cents, on the London-based ICE Futures Europe exchange at 1:12pm local time, climbing above $50 for the first time since June 7. Prices on Wednesday gained 86 cents, or 1.8 per cent, to close at $49.70. The global benchmark crude traded at a premium of $2.42 to September West Texas Intermediate.
WTI for August delivery, which expires Thursday, was up 24 cents to $47.36 a barrel on the New York Mercantile Exchange. Total volume traded was about 14 per cent below the 100-day average. Prices advanced 72 cents, or 1.6 per cent, to settle at $47.12 on Wednesday. The more-active September contract added 26 cents to $47.58.
Crude stockpiles at Cushing, Oklahoma, the delivery point for WTI and the nation’s biggest oil-storage hub, fell for a ninth week to 57.5 million barrels last week, the longest run of declines since June 2014, EIA data showed. Still, U.S. production expanded for a third week to 9.43 million barrels a day in the week ended July 14, according to the EIA.