U.S. West Texas Intermediate (WTI) crude was trading at $55.42 per barrel, down 32 cents, as of 1:19 p.m. EST (1819 GMT). Brent crude futures were down 19 cents at $62.02 a barrel, having fallen by 1.5 percent on Tuesday, its largest one-day drop in a month.
HONG KONG: Oil extended gains from the highest close in more than three years as U.S. industry data signaled crude stockpiles dropped an eighth week.
Futures climbed as much as 0.9% in New York after rising 2.5% the previous two sessions. Inventories fell by 11.2 million barrels last week, the American Petroleum Institute was said to report on Tuesday. If the draw is replicated in Energy Information Administration data Wednesday, it will be the biggest decline for this time of the year since 1999.
Oil is continuing its advance after a second annual gain as the Organization of Petroleum Exporting Countries and its allies trim supply to drain a global glut. The OPEC-led group is facing the challenge of rising U.S. crude output, which is forecast by the EIA to expand above 10 million barrels a day as soon as next month and top 11 million in November 2019.
“There are signs of another good drop in stockpiles and the market seems to believe that we’re going to see inventory tightening at a fairly decent rate,” said Ric Spooner, a Sydney-based analyst at CMC Markets. “The positive trend remains in place.”
West Texas Intermediate for February delivery rose as much as 57 cents to US$63.53 a barrel on the New York Mercantile Exchange, and was at US$63.43 at 7:52 a.m. in London. Total volume traded was about 16% above the 100-day average. Prices advanced US$1.23 to US$62.96 on Tuesday, the highest close since December 2014.
Brent for March settlement climbed as much as 44 cents, or 0.6%, to US$69.26 a barrel on the London-based ICE Futures Europe exchange after advancing 1.5% on Tuesday to the highest since December 2014. The global benchmark crude was at a premium of US$5.82 to March WTI.
U.S. crude inventories probably dropped by 3.75 million barrels last week, according to a Bloomberg survey before the EIA report.
Stockpiles at Cushing, Oklahoma, the delivery point for WTI and the nation’s biggest oil-storage hub, probably slid by 1.5 million barrels, an estimate compiled by Bloomberg shows. - Bloomberg
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