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WTI oil futures surge past $46 after massive crude inventory draw
WTI oil futures surge past $46 after massive crude inventory draw
Investing.com | Jul 06, 2017 11:12AM ET
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U.S. crude oil inventories fall 6.299 million vs. forecast for 2.283 million draw
Investing.com – West Texas Intermediate oil extended gains, surging more than 2% in North American trade on Thursday, after data showed that oil supplies in the U.S. registered a much larger-than-expected inventory draw.
Crude oil for August delivery on the New York Mercantile Exchange gained $1.17, or 2.59%, to trade at $46.30 a barrel by 11:03AM ET (15:03GMT) compared to $45.87 ahead of the report.
The U.S. Energy Information Administration said in its weekly report that crude oil inventories fell by 6.299 million barrels in the week ended June 30. Market analysts' had expected a crude-stock draw of 2.283 million barrels, while the American Petroleum Institute late Wednesday reported a supply draw of 5.674 million barrels.
Supplies at Cushing, Oklahoma, the key delivery point for Nymex crude, decreased by 1.334 million barrels last week, the EIA said. Total U.S. crude oil inventories stood at 502.9 million barrels as of last week, according to press release, which the EIA considered to be “in the upper half of the average range for this time of year”.
The report also showed that gasoline inventories decreased by 3.669 million barrels, compared to expectations for a draw of 1.067 million barrels, while distillate stockpiles fell by 1.850 million barrels, compared to forecasts for an increase of 0.217 million.
The report came out one day later than usual due to Tuesday’s Independence Day holiday.
Elsewhere, on the ICE Futures Exchange in London, Brent oil for September delivery traded up $1.29, or 2.70%, to $49.08 by 11:08AM ET (15:08GMT), compared to $48.52 before the release.
Meanwhile, Brent's premium to the WTI crude contract stood at $2.65 a barrel by 11:09AM ET (15:09GMT), compared to a gap of $2.66 by close of trade on Wednesday.
Thursday’s strong rebound came after oil tumbled around 4% in the prior session after data showing that exports by the Organization of Petroleum Exporting Countries (OPEC) rose for a second month in June, adding to doubts over whether the group can do enough to tighten the market.
The Reuters’ report showed an uptick in OPEC exports for June to 25.92 million barrels per day (bpd), up 450,000 bpd from May, and 1.9 million bpd more than a year ago.
In May, Opec and non-Opec members agreed to extend production cuts for a period of nine months until March, but stuck to production cuts of 1.8 million bpd agreed in November last year.
The group's efforts to rebalance the market have been undermined by rising production from Libya and Nigeria, which are exempt from the output-cut agreement and by increasing shale production in the U.S.
Adding to Wednesday’s bearish sentiment was a Bloomberg report saying that Russia doesn’t want to change the current deal because any further supply curbs would send the wrong message to the market, according to government officials