Oil prices rose on Thursday after United States data showed a surprise decline in inventories, suggesting that a global glut may be ending after moves by OPEC to cut production.
"If someone told me that the OPEC cuts would be well above historic numbers, you would expect prices to be up to $60 or $65 a barrel", he said. Friday's US oil rig count data is very important for oil prices, as this will highlight the rate of investments in USA oil markets. Prices yesterday rose 86 cents to close at US$54.45, the highest settlement since July 2, 2015.
Following the upward trend in crude oil prices in global markets, all credible indexed of Black Gold went through an upsurge in the transactions leading to February 17.
Futures in NY are still set for an advance of 1.1 per cent this week. The small inventory build in crude oil was offset by a large total petroleum draw.
Analysts from Goldman Sachs Group Inc to Energy Aspects Ltd have said U.S. stockpiles were boosted by deliveries of crude purchased before oil producers started cutting output in January.
Traders are selling oil held in tankers anchored off Malaysia, Singapore and Indonesia in a sign that the production cut led by OPEC is starting to have the desired effect of drawing down bloated inventories.
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The Organization of Petroleum Exporting Countries agreed on November 30 to cut output by 1.2 million barrels per day for the first six months of 2017, in addition to 558,000 bpd of cuts pledged by independent producers such as Russian Federation.
West Texas Intermediate for April delivery was at US$53.99 a barrel, down 46 cents, on the New York Mercantile Exchange as of 12.43pm in London.
United States crude stocks grew by 564,000 barrels over the week ending on Feb.17, according to the country's Energy Information Administration (EIA). "It's a battle between how quick OPEC can cut without shale catching up", Nunan said, referring to USA drilling in shale formations that has shown an upsurge this year.
OPEC producers lowered their supplies by over 90% of their agreed volume in the first month of this year, indicating the strategy to prop-up prices by declining supplies.
Nymex reformulated gasoline blendstock for March -the benchmark gasoline contract-fell 1.38 cents, or 0.9%, to settle at $1.5148 a gallon.
Supplies at Cushing, Oklahoma, the biggest U.S. storage hub and the delivery point for WTI, dropped by 1.53 million barrels, the steepest decline since October of previous year.