TOKYO: U.S. oil prices extended gains on Thursday amid another drawdown in U.S. crude inventories and strong local gasoline demand, while signs OPEC may not raise output to address shrinking supplies from Iran also buoyed markets.
U.S. West Texas Intermediate crude for October delivery was up 31 cents, or 0.4 percent, at $71.43 a barrel by 0018 GMT, after settling up $1.27.
Front-month London Brent crude, for November delivery, was down 2 cents at $79.38, having ended up 37 cents.
U.S. crude oil stockpiles fell for a fifth straight week to 3-1/2 year lows in the week to Sept. 14, while gasoline inventories also showed a larger-than-expected draw on unseasonably strong demand, the Energy Information Administration said on Wednesday. [EIA/S]
Crude inventories fell by 2.1 million barrels, the EIA data showed, compared with expectations for a decrease of 2.7 million barrels.
U.S. sanctions affecting Iran's oil exports come into force on Nov. 4 and many buyers have already scaled back Iranian purchases. But it is unclear how easily other producers can compensate for any lost supply.
The Organization of the Petroleum Exporting Countries and other producers including Russia meet on Sunday in Algeria to discuss how to allocate supply increases within their quota framework to offset the loss of Iranian supply.
OPEC sources have told Reuters no immediate action was planned and producers would discuss how to share a previously agreed output increase. - Reuters
Oil prices surge as inventory draw adds to supply concerns
NEW YORK: U.S. oil futures surged nearly 2 percent on Wednesday as they were bolstered by a fifth weekly crude inventory drawdown and strong domestic gasoline demand amid ongoing global supply concerns over U.S. sanctions on Iran that come into force in November.
U.S. crude inventories fell 2.1 million barrels last week to 394.1 million barrels, the lowest level since February 2015, government data showed. Gasoline stocks fell 1.7 million barrels versus forecasts for a 100,000-barrel drop. [EIA/S]
"It was a squarely bullish report," said John Kilduff, a partner at Again Capital Management in New York. "The summer-like demand from drivers is proving unrelenting."
Gasoline consumption usually picks up in the summer and wanes in autumn, but demand remained strong in the latest week, estimated at 9.5 million barrels per day.
U.S. crude futures settled up $1.27, or 1.8 percent, at $71.12 a barrel.
Brent futures also rose but the gains were more muted, as the global benchmark ended 37 cents, or 0.5 percent, higher at $79.40 a barrel.
In the previous session, Brent rose 1.3 percent on a media report that Saudi Arabia, the world's largest oil exporter, was comfortable with prices above $80, indicating the producer would not try to increase output to drive prices lower.
Reuters reported on Sept. 5 that Saudi Arabia wanted oil to stay between $70 and $80 to keep a balance between maximising revenue and keeping a lid on prices until U.S. congressional elections.
The Organization of the Petroleum Exporting Countries and other producers including Russia meet on Sept. 23 in Algeria to discuss how to allocate supply increases within their quota framework to offset the loss of Iranian supply.
U.S. sanctions affecting Iran's oil exports come into force on Nov. 4 and many buyers have already scaled back Iranian purchases. But it is unclear how easily other producers can compensate for any lost supply. - Reuters