Oil Edges Higher After U.S. Crude Stocks Fall
August 03 2017 - 6:25AM
Dow Jones News
By Sarah McFarlane and Biman Mukherji
Oil futures nudged higher on Thursday, building on a rebound
overnight after investors ultimately took a bullish view on weekly
U.S. inventory data.
Brent crude, the global oil benchmark, rose 0.3% to $52.54 a
barrel on London's ICE Futures exchange. On the New York Mercantile
Exchange, West Texas Intermediate futures were trading up 0.3% at
$49.75 a barrel.
The Energy Information Administration reported a
1.5-million-barrel drop in U.S. crude inventories last week, below
analysts' expectations. However, "a strong increase in demand was
enough to appease the bullish investors," said ANZ Bank. Refiners'
capacity utilization jumped to 95.4% last week, the government also
said.
Brent crude prices hit a two-month high on Tuesday, having
climbed steadily in recent weeks on signs that the market is
rebalancing after more than three years of oversupply.
"A decent chunk of the global inventory overhang has been run
down and that process continues and is picking up pace," said
Richard Mallinson, analyst at consultancy Energy Aspects.
Production caps led by the Organization of the Petroleum
Exporting Countries and Russia, along with strong demand, are
helping dent still-historically high global stocks, he added.
JBC Energy revised its forecast for global oil product demand
growth in 2017 to 1.46 million barrels a day, compared with its
January forecast of 1.1 million barrels a day, due to strong demand
for gas oil and gasoline in some countries.
Market participants continued to monitor tensions in Venezuela,
where the threat of U.S. sanctions on the oil sector remains.
"The market is still watching for how that might unfold and
trying to understand if any sanctions were imposed to what extent
would it reduce Venezuelan production or exports," said Mr.
Mallinson, adding that issues facing the industry included a lack
of investment, maintenance and a shortage of equipment.
Nymex reformulated gasoline blendstock--the benchmark gasoline
contract--fell 0.1% to $1.64 a gallon. ICE gas oil changed hands at
$491.25 a metric ton, UP $3.00 from the previous settlement.
Write to Sarah McFarlane at sarah.mcfarlane@wsj.com and Biman
Mukherji at biman.mukherji@wsj.com
(END) Dow Jones Newswires
August 03, 2017 06:10 ET (10:10 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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