Oil up over 2%; US crude rises to 15-month high on big stock drawdown

NEW YORK — Oil prices jumped more than 2% on Wednesday, with US crude settling at its highest in 15 months after the government reported a surprisingly large drop in inventories for the sixth week out of seven.

The US Energy Information Administration (EIA) said crude stocks fell 5.2 million barrels in the week ended Oct. 14, versus forecasts for a 2.7-million barrel build.

Crude stocks generally rise at this time of year as refineries go into maintenance. Refinery utilization is down to 85% from nearly 94% in early September.

The EIA said US crude imports slid by 912,000 barrels per day ( bpd) last week to 6.47 million bpd, the lowest since November 2015, crimping inventories.

“This lowest import pace in some 16 months is surprising given the fact that the Organization of Petroleum Exporting Countries (OPEC) production has recently attained a record level that would imply easy availability,” said Jim Ritterbusch of Chicagobased oil markets consultancy Ritterbusch & Associates.

US West Texas Intermediate ( WTI) crude’s front-month contract, November, closed up $1.31, or 2.60%, at $51.60 a barrel for its highest settlement since July 14. Its session peak of $51.93 was the highest in 15 months.

With expiry due on Thursday, the November contract saw lighter trades than December WTI, which hit a June high of $52.22. The December contract will be front-month from Friday.

London- traded Brent crude settled up 99 cents, or 1.90%, at $52.67.

Some market participants were not impressed by the crude inventory drop, citing instead the large gasoline build of 2.5 million barrels for last week versus forecasts for a 1.3 millionbarrel drop.

Oil prices have rallied 15% in the three weeks after the Organization of the Petroleum Exporting Countries proposed to enforce from November its first output cut since 2008.

Khalid al- Falih, energy minister of Saudi Arabia, which dominates OPEC, told the Oil & Money conference in London “fundamentals are improving and the market is clearly balancing” after prices fell below $30 from 2014 highs above $100. —