Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

Oil rises after ninth weekly stock drawdown in U.S.

Published 07/21/2016, 04:18 AM
Updated 07/21/2016, 04:18 AM
© Reuters. Oil and gas tankers are anchored off the Marseille harbour

© Reuters. Oil and gas tankers are anchored off the Marseille harbour

By Christopher Johnson

LONDON (Reuters) - Oil prices moved slightly higher on Thursday after the U.S. Energy Department reported a ninth consecutive weekly drawdown of crude stocks, although an overall build in oil inventories capped gains.

U.S. West Texas Intermediate crude for September delivery (CLc1), the new front-month contract from Thursday, was up 15 cents at $45.90 a barrel at 0800 GMT. The August contract expired on Wednesday after rising 29 cents, or 0.7 percent, to settle at $44.94 a barrel.

Brent crude's front-month contract (LCOc1) was up 15 cents at $47.32 a barrel.

U.S. crude inventories fell 2.3 million barrels in the week ending July 15, data from the U.S. Energy Information Administration showed. [EIA/S]

But at 519.5 million barrels, inventories are at historically high levels for this time of year, the EIA said.

"This week's report was moderately bullish for crude, which drew slightly more than expected," said Michael Wittner, oil analyst at Societe Generale (PA:SOGN).

Gasoline stocks rose 911,000 barrels, against a forecast for unchanged, and are well above the upper limit of the average range, the EIA said.

July is the peak of summer when Americans traditionally take to the road, driving up gasoline demand.

A glut of refined products has worsened an already-grim outlook for U.S. crude oil for the rest of the year and the first half of 2017, traders warned this week, as the spread between near-term and future delivery prices reached its widest in five months.

A glut in oil products threatens to spill back into oil prices, depressing crude, BMI Research said in a note: "An abundance of fuels threatens to dampen crude demand."

Overall, U.S. oil inventories are at a record high, reflecting a very well supplied global market.

That should undermine prices, said Tamas Varga, oil analyst at London brokerage PVM Oil Associates:

© Reuters. Oil and gas tankers are anchored off the Marseille harbour

"There is lots of oil around," said Varga. "The market strength is not sustainable."

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.