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WTI oil jumps to fresh 11-month high as crude stocks fall 3.2M barrels

Commodities Jun 08, 2016 10:37AM ET
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© Reuters. WTI oil futures hit fresh 11-month high after weekly supply data

Investing.com - West Texas Intermediate oil futures extended gains in North America trade on Wednesday to hit a fresh 11-month high after data showed that oil supplies in the U.S. fell more than expected last week.

Crude oil for July delivery on the New York Mercantile Exchange rallied 85 cents, or 1.69%, to trade at $51.21 a barrel by 14:36GMT, or 10:36AM ET. Prices were at around $51.11 prior to the release of the inventory data after climbing to a daily peak of $51.34, the most since July 16.

The U.S. Energy Information Administration said in its weekly report that crude oil inventories fell by 3.2 million barrels in the week ended June 3. Market analysts' expected a crude-stock decline of 2.8 million barrels, while the American Petroleum Institute late Tuesday reported a supply drop of 3.6 million barrels.

Supplies at Cushing, Oklahoma, the key delivery point for Nymex crude, fell by 1.4 million barrels last week, the EIA said. Total U.S. crude oil inventories stood at 532.5 million barrels as of last week.

The report also showed that gasoline inventories increased by 1.0 million barrels, compared to expectations for a drop of 0.7 million barrels, while distillate stockpiles rose by 1.8 million barrels.

U.S. crude futures are up nearly 90% since falling to 13-year lows at $26.05 on February 11 as a decline in U.S. shale production boosted sentiment. However, with prices now at levels that make drilling economical for some firms, the rig count might start rising soon and the decline in U.S. production may slow.

Elsewhere, on the ICE Futures Exchange in London, Brent oil for August delivery rose 95 cents, or 1.85%, to trade at $52.39 a barrel after hitting a daily peak of $52.55, a level not seen since October 12.

On Tuesday, London-traded Brent rallied 89 cents, or 1.76%, on reports of more attacks by militants to Nigeria oil operations.

Brent prices have been well-supported in recent weeks as unplanned supply disruptions in Africa eased concerns over a global glut. Brent futures prices are up by roughly 90% since briefly dropping below $30 a barrel in mid-February.

Meanwhile, Brent's premium to the WTI crude contract stood at $1.31 a barrel, compared to a gap of $1.08 by close of trade on Tuesday.

WTI oil jumps to fresh 11-month high as crude stocks fall 3.2M barrels
 

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