SEOUL, LONDON
Oil headed for a second weekly increase as a surprise pullback in US crude inventories compounded signs that a global glut is easing.
Futures in New York are up 1.5 per cent this week after closing at the highest level in two weeks on Thursday. While the US is pumping near record volumes, exports also jumped to a four-month high last week, helping drain the nation’s stockpiles.
Oil stocks in the biggest US storage hub plunged to the lowest level in more than three years. While crude struggled after the best January performance in more than a decade, it’s now finding its footing again as the Organisation of Petroleum Exporting Countries and its allies including Russia pledge to persist with output curbs to rebalance the market, and demand remains robust.
“Crude stockpiles resumed their downward trajectory” in the US, said Stephen Brennock, an analyst at PVM Oil Associates Ltd. in London. “The report was well-received by market bulls.”
West Texas Intermediate for April delivery fell 29 cents at $62.48 a barrel on the New York Mercantile Exchange at 10:20am. London time, after rising $1.09 on Thursday. Total volume traded was about 35 per cent below the 100-day average.
Brent for April settlement slipped 40 cents to $65.99 a barrel on the London-based ICE Futures Europe exchange. Prices are up 1.8 per cent this week, also set for a second weekly gain. The global benchmark crude was at a $3.52 premium to WTI.
US crude exports rose to about 2 million barrels a day last week, according to Energy Information Administration data Thursday. Nationwide inventories declined the most in five weeks to 420.5 million barrels, in contrast to a 2.9 million gain forecast in a Bloomberg survey. Stockpiles at the storage hub of Cushing, Oklahoma, shrank for a ninth straight week to 30 million barrels.
The country’s crude production ticked lower for the first time since early January to 10.3 million barrels a day, the EIA report also showed. Baker Hughes data due on Friday will show the number of rigs drilling for oil in America, which had risen to a two-year high last week.
