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Oil edges up on falling U.S. crude inventories, but supply remains ample

by January 18, 2018 General

By Gloystein

SINGAPORE (Reuters) – inched up on Thursday on a reported decline in U. S. crude inventories, but prices stayed below recent three-year highs as fuel supplies remain ample and as refineries scale back operations.

Brent crude futures were at $69.48 at 0103 GMT, up 10 cents, or 0.1 percent, from their last close. On Monday, they hit their highest since December, 2014 at $70.37 a barrel.

U. S. Intermediate (WTI) crude futures were at $64.15 a barrel, up 18 cents, or 0.3 percent, from their last settlement. WTI marked a December-2014 peak of $64.89 a barrel on Tuesday.

In an effort to tighten markets and prop up prices, a group of major around the Organization of the Petroleum Exporting Countries (OPEC) and started to withhold production in January last year, and the cuts are set to last through 2018.

“Prices … rallied on the back of noticeable de-stocking of crude inventories, owing in part to reduced crude production from OPEC and Russia,” said Fawad Razaqzada, at future brokerage

U. S. crude inventories fell by 5.1 million barrels in the week ended Jan. 12 to 411.5 million, according to the on Wednesday.

Despite this, many analysts are warning that the recent oil price rally, which has lifted crude by around 14 percent since early December, may be about to run out of steam.

“We reckon that the upside is now limited for … U.

S. will ramp up production in the coming months … U. S. will increase by a good 111,000 barrels per day (bpd) next month to 10 million bpd, and … will rise to about 11 million bpd by the end of next year. This would put the U. S. on par with and Russia’s output,” Razaqzada said.

What’s more, the data showed a well supplied fuel product market, which could mean lower crude demand going forward.

U. S. refinery crude runs fell by 420,000 bpd and refined product stocks rose, implying a well supplied market.

Gasoline stocks rose by 1.8 million barrels while distillate fuels stockpiles, which include diesel and heating oil, climbed by 609,000 barrels, the data showed.

and production data is due on Thursday from the (EIA).

(Reporting by Gloystein; Editing by Joseph Radford)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)