Crude oil rises after report shows drop in stockpiles
TOKYO: Oil futures climbed nearly 1 per cent on Thursday after data showed a surprise decline in US crude stocks as imports fell, supporting the view that a global glut is ending.
The US West Texas Intermediate crude April contract rose 41 cents, or 0.8 per cent, to $54.00 a barrel by 0743 GMT.
Brent crude was up 40 cents, or 0.7 per cent, at $56.24, although both benchmarks were still well within recent tight ranges.
Crude inventories fell by 884,000 barrels in the week to February 17 to 512.7 million, compared with analyst expectations for an increase of 3.5 million barrels, data from industry group, the American Petroleum Institute, showed on Wednesday.
That added to optimism earlier in the week when the Organization of the Petroleum Exporting Countries said a deal with other producers including Russia to curb output was showing a high level of compliance.
However, for prices to break out of their trading ranges, the market needs to see signs that OPEC inventories are falling, said Tony Nunan, oil risk manager at Mitsubishi Corp in Tokyo. “It’s a battle between how quick Opec can cut without shale catching up,” Nunan said, referring to US drilling in shale formations that has shown an upsurge after prices rose this year. “What Opec really has to do is get the inventories down,” he said. Eleven non-Opec oil producers that joined the Opec deal have delivered at least 60 per cent of promised curbs so far, Opec sources said on Wednesday, higher than initially estimated.