Oil holds gain near $50 as falling US crude supplies trim glut1 min read . Updated: 26 May 2016, 08:19 AM IST
Oil has surged almost 90% since hitting a 12-year low earlier this year on signs the global oversupply will ease as Nigerian and US production falls
Hong Kong: Oil traded near $50 a barrel as US crude stockpiles declined more than forecast, trimming a glut.
Futures were little changed in New York after advancing 3.8% the previous three sessions. Inventories slid by 4.23 million barrels last week, according to a report from the Energy Information Administration. They were projected to slide by 2 million. The final preparatory gathering of Opec officials before the ministerial meeting next week didn’t include discussions on limiting output, signalling the group will stick with its strategy of defending market share.
Oil has surged almost 90% since hitting a 12-year low earlier this year on signs the global oversupply will ease as Nigerian and US production falls. The Organization of Petroleum Exporting Countries (Opec) is unlikely to set an output target when it meets 2 June as it sticks with Saudi Arabia’s strategy of squeezing out rivals, according to analysts surveyed by Bloomberg.
“The immediate driver is a good draw on US crude stockpiles, helping to nudge the price up a bit further," Ric Spooner, a chief analyst at CMC Markets in Sydney, said by phone. “The market hasn’t had any bad news to knock it off its perch but the price is likely to struggle if it gets into the $50s. There is still quite a bit of inventory around."
West Texas Intermediate for July delivery was at $49.62 a barrel on the New York Mercantile Exchange, up 6 cents, at 8:41am Hong Kong time. The contract gained 94 cents to $49.56 on Wednesday. Total volume traded was about 65 percent below the 100-day average.
Brent for July settlement rose 5 cents to $49.79 a barrel on the London-based ICE Futures Europe exchange. The contract increased $1.13, or 2.3%, to $49.74 on Wednesday. The global benchmark crude was at a premium of 17 cents to WTI.
US crude production dropped for an 11th week to 8.77 million barrels a day, the lowest level since September 2014, the EIA report showed Wednesday. Stockpiles at Cushing, Oklahoma, the delivery point for WTI and the nation’s biggest oil-storage hub, fell by 649,000 barrels, the first decline in five weeks. Bloomberg