- Oil Holds Advance Above $48 as Stockpiles Drop to Six-Month Low
Oil held gains above $48 a barrel as government data showed U.S. crude stockpiles shrank to the lowest level since the start of the year, easing a global glut.
Futures were little changed in New York after prices rose 1.8 percent on Wednesday to an eight-week high. American inventories declined by 7.21 million barrels last week to the lowest level since Jan. 6, according to an Energy Information Administration report. Kuwait agreed to trim sales volumes of oil for 2017, joining the U.A.E. in promising to pump less after Saudi Arabia called on OPEC producers to cut more.
Oil has traded below $50 a barrel since May amid concern rising global output will offset reduced flows from members of the Organization of Petroleum Exporting Countries and its allies including Russia. While U.S. crude stockpiles continue to decline during a period of strong seasonal demand, nationwide inventories remain almost 100 million barrels above the five-year average.
“The market has paused a little bit,” said Ric Spooner, an analyst at CMC Markets in Sydney. “Despite all of the good news, we are now getting within the levels where the market may get a bit concerned about the potential to add shale oil production as we head towards $50.”
West Texas Intermediate for September delivery fell as much as 18 cents to $48.57 a barrel on the New York Mercantile Exchange, and was at $48.68 at 2:55 p.m. in Singapore. Total volume traded was about 48 percent below the 100-day average. Prices gained 86 cents to $48.75 on Wednesday, the highest closing level since May 30.
Brent for September settlement fell as much as 19 cents to $50.78 a barrel on the London-based ICE Futures Europe exchange. Prices gained 1.5 percent to $50.97 on Wednesday. The global benchmark traded at a premium of $2.22 to WTI.
U.S. inventories fell to 483.4 million barrels, the lowest level in more than six months and more than the median 3 million barrel drop expected in a Bloomberg analyst survey. Stockpiles at Cushing, Oklahoma, the delivery point for WTI and the nation’s biggest oil-storage hub, also slipped for a 10th week, according to the EIA data.
Oil-market news:
- U.S. crude production dropped by 19,000 barrels a day, slipping for the first time in four weeks. However, production only declined in Alaska while output from the lower-48 states jumped for a fourth week to the highest level since July 2015.
- Efforts to resolve the standoff between Qatar and a Saudi-led alliance have reached an impasse, according to a Gulf official with direct knowledge of the matter.
- Suspected Boko Haram militants ambushed an exploration team working for the Nigerian National Petroleum Corp., killing 10 people, the Nigerian army said.
