Oil edges up on bets on falling US crude stocks

17/08/2017 05:52 AST

Oil prices were little changed on Wednesday after US crude stockpiles plunged their most in nearly a year, paring gains seen early in the session.

US crude inventories dropped for a seventh consecutive week, falling 8.95 million barrels last week to 466.5 million barrels to their lowest since January 2016. Including emergency reserves, crude stocks were at 1.15 billion barrels, the lowest levels since October 2015, the Energy Information Administration said.

The decline confirmed Tuesday’s data from the American Petroleum Institute which showed crude inventories dropped 9.2 million barrels in the week to Aug. 11. That compared with analysts’ expectations for a decrease of 3.1 million barrels.

The metric is closely watched by the Organization of the Petroleum Exporting Countries and other oil producers which have curtailed output to boost prices.

“I would describe this as a bullish report and probably the effect would be we’re going to keep ourselves pinned here waiting for the next signal,” said Gene McGillian, director of market research at Tradition Energy. Seasonally, US demand usually picks up during the summer. “If we see these draws past Labor Day, it will drive the market, possibly past $50.

Brent crude futures were up 17 cents at $50.97 per barrel by 10:49 a.m. EDT (1449 GMT), after earlier trading as high as $51.40. US West Texas Intermediate (WTI) crude futures were at $47.53 a barrel, down 2 cents, after earlier rising to $47.99.

More broadly, analysts said ample supplies were preventing prices from moving much higher. “This bullish print is being tempered somewhat by unchanged gasoline inventories versus the expectation of a draw,” said Matt Smith, director of commodity research at ClipperData.

“The peak of summer driving season has now passed, and demand for crude should wane also as refinery runs drop, Gasoline demand will ebb as summer road trips are mostly over and children head back to school.

The Gulf Today