Oil prices rise on ex­pected de­cline in US crude stocks

Kuwait Times - - BUSINESS -

LON­DON: Oil prices rose yes­ter­day on fore­casts of a steep draw in US crude stocks that could in­di­cate global over­sup­ply is start­ing to shrink. Bench­mark Brent crude oil fu­tures were trad­ing up 56 cents, or 1 per­cent, at $55.48 a bar­rel at 1329 GMT. US West Texas In­ter­me­di­ate (WTI) crude fu­tures were up 29 cents at $52.41 a bar­rel, not far off a one-week high of $52.52.

An­a­lysts polled by Reuters ex­pected weekly US crude oil in­ven­to­ries to show a draw of 2.4 mil­lion bar­rels in the week to Dec 16. Stocks fell more than ex­pected in data pub­lished last week, lift­ing ex­pec­ta­tions for an­other large drop in this week’s data. A deal to cut global sup­ply among OPEC and non-OPEC pro­duc­ers struck this month has boosted oil prices to 17-month highs. The gains have set up 2016 to be the first year since 2012 in which Brent has risen. Rus­sian En­ergy Min­is­ter Alexan­der Novak told Rus­sian news­pa­per Ve­do­mosti that Rus­sia may ex­tend a pro­duc­tion cut be­yond the first half of 2017 if needed.

“We are in a wait-and-see mood af­ter OPEC news­flow caused much volatil­ity,” said Frank Klumpp, oil an­a­lyst at Stuttgart­based Lan­des­bank Baden-Wuert­tem­berg. “The new bal­ance seems to be be­tween $53 and $57 a bar­rel on Brent for the next weeks.” Asia is seen post­ing its big­gest net ad­di­tions to refin­ing ca­pac­ity in three years in 2017, fur­ther boost­ing de­mand for crude in the world’s largest and fastest-growing oil-con­sum­ing re­gion.

The in­crease amounts to roughly an ad­di­tional 1.5 per­cent of refin­ing ca­pac­ity on top of Asia’s to­tal in­stalled ca­pac­ity of nearly 29 mil­lion bar­rels per day. Still, traders see no out­right sup­ply short­age for Asian re­finer­ies, as the Or­ga­ni­za­tion of the Petroleum Ex­port­ing Coun­tries is shield­ing most of its Asian cus­tomers from the planned cuts. — Reuters

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