Investing.com – Crude oil prices settled sharply higher as data showing US domestic production fell for the tenth-straight week offset a rise in production to nearly 10 million barrels a day.
On the New York Mercantile Exchange crude futures for March delivery rose 1.8% to settle at $65.69 a barrel, while on London's Intercontinental Exchange, Brent gained 0.96% to trade at $70.64 a barrel.
Inventories of U.S. crude fell by roughly 1.071 million barrels for the week ended Jan. 19, beating expectations for of a draw of one million barrels.
Gasoline inventories – one of the products that crude is refined into – rose by 3.1 million barrels, well above expectations for a rise of 2.49 million barrels, while supplies of distillate – the class of fuels that includes diesel and heating oil – unexpectedly rose by 639,000 barrels, confounding expectations for a decline of 1.471 million barrels.
The tenth-straight weekly draw in crude supplies surprised some market participants as the American Petroleum Report (API) released Tuesday showed crude supplies unexpectedly rose by 4.8 million barrels, while a weaker dollar was also said to be a supportive factor for the sharp uptick in oil prices.
Rising US domestic oil production, which many fear could halt the rally in the oil market, inched closer to an unprecedented 10 million barrels per day. U.S. oil production rose to nearly 9.9 million barrels a day last week, the EIA said.
Russia and Saudi energy ministers, Alexander Novak and Khalid al-Falih, both said the markets were too focused on the swings in U.S. shale production, which represented only a modest portion of the global output.