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Oil Prices Extend Gains as Crude Stockpiles Rise Less Than Expected

Published 01/31/2019, 01:26 AM
Updated 01/31/2019, 01:26 AM
© Reuters. - Oil prices extended gains on Thursday in Asia for the third day after the U.S. Energy Information Administration (EIA) weekly report showed crude stockpiles rose less than expected.

New York-traded Crude Oil WTI Futures were up 0.6% at $54.56 per barrel by 1:15 AM ET (06:15 GMT), after hitting a session peak of $54.92 on Wednesday. The last time WTI hit such highs was on Nov. 20.

London-traded Brent Oil Futures, the global oil benchmark, were also up 0.8% at $62.06.

U.S. crude inventories rose 919,000 barrels for the week ended Jan. 25 while analysts expected an increase of 3.2 million barrels, the EIA said.

The gain in prices also came after the EIA report showed a sharp drop in Saudi crude supply to the U.S. The EIA data showed imports from Saudi Arabia fell by more than half from the previous week to 442,000 barrels per day (bpd).

"This is the second lowest level in weekly data going back to 2010," said ANZ analysts quoted by CNBC. They said the figures showed that OPEC cuts are affecting trade. Earlier this week, Saudi oil minister Khalid al-Falih said the kingdom would pump "well below" the output level it agreed with OPEC and its partners in December for the first half of this year.

Elsewhere, U.S. sanctions imposed on Venezuela’s state-oil firm PDVSA this week are also causing some supply disruptions and were cited as supportive for oil prices.

Meanwhile, Chinese PMI received some focus today after the National Bureau of Statistics showed China’s factory activity shrank for the second straight month.

The official Purchasing Managers' Index (PMI) came in at 49.5 in January. The reading was slightly higher than the 49.4 in December, but still below the 50-mark that separates growth from contraction.

Meanwhile, the services PMI for January came in at 54.7, better than the 53.8 reported in the previous month.

The outcome of the ongoing Sino-U.S. trade talks that began on Wednesday is also expected to influence the oil market later this week.

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