Hong Kong: Oil advanced a second day after data showed that US production fell the most in eight months and Iran said it’s ready to act with Opec once it regains pre-sanctions market share.
Futures rose as much as 3.5 per cent in New York after gaining 0.3 per cent on Wednesday. US output slid to the lowest since September 2014 last week, according to government data. A wildfire in the heart of Canada’s oil-sands-producing region may affect more than 1 million barrels a day of capacity.
Oil has rebounded after slumping to the lowest since 2003 earlier this year amid signs the global glut will ease as US output declines.
The Organisation of Petroleum Exporting Countries is without a proposal to revive output limits at its June meeting after failing last month to agree on a supply freeze, according to six delegates from the group. Iran, which rejected the deal, may join Opec in a quota policy as soon as one to two months after it restores exports to their level before sanctions over its nuclear policy, National Iranian Oil Co. Managing Director Rokneddin Javadi said in Tehran.
“We see a tightening of fundamentals toward the end of 2016,” Abhishek Deshpande, an analyst at Natixis SA in London, said in a report. “Outages, crude storage could tip the balance in the near term.”
West Texas Intermediate for June delivery rose as much as $1.54 to $45.32 a barrel on the New York Mercantile Exchange and was at $45.20 at 10:02am. London time. The contract gained 13 cents to $43.78 on Wednesday. Total volume traded was about 78 per cent above the 100-day average.
US output
Brent for July settlement gained as much as $1.28, or 2.9 per cent, to $45.90 a barrel on the London-based ICE Futures Europe exchange. The contract fell 35 cents to $44.62 on Wednesday. The global benchmark crude was at a premium of 1 cent to WTI for July.
US production slid by 113,000 barrels a day to 8.83 million a day, according to a report on Wednesday from the Energy Information Administration. That’s the biggest weekly drop since August 2015. Nationwide crude inventories increased by 2.8 million barrels to 543.4 million, the most since 1929.
