Brent crude futuresdipped 20 cents, or 0.3 percent, to settle at $72.61 a barrel, while U.S. West Texas Intermediate (WTI) crude declined 43 cents to settle at $67.20 a barrel, with a 0.7 percent loss. (Crude oil storage tanks are seen from above at the Cushing oil hub, in Cushing, Oklahoma. - Reuters filepic)
NEW YORK: Oil futures rallied about 2 percent on Wednesday as U.S. crude inventories unexpectedly fell and an official forecast of crude oil supply growth from the world's top producer was revised lower.
A widespread power outage in Venezuela that has stalled crude exports from the OPEC-member nation, which has already seen reduced shipments from U.S. sanctions, helped to tighten the market.
Brent crude futures settled at US$67.55 a barrel, up 88 cents, or 1.32 percent. U.S. crude oil futures settled at $58.26 a barrel, rising $1.39 cents, or 2.44 percent.
Both benchmarks settled at their highest levels since mid-November.
U.S. crude stocks fell last week as refineries hiked output, the Energy Information Administration (EIA) said.
Crude inventories fell by 3.9 million barrels in the last week, compared with analysts' expectations for an increase of 2.7 million barrels.
"With the refiners starting to slowly come out of maintenance, OPEC cuts starting to kick in, and Venezuelan supplies, you’re probably now looking at a future with more draws in the coming weeks," said Phil Flynn, analyst at Price Futures Group in Chicago. "It looks very supportive as refiners come out of maintenance.”
Other EIA data showed U.S. crude output edged down from a record high, dropping 100,000 barrels per day (bpd) to 12 million bpd last week.
On Tuesday, the EIA revised down its estimate for domestic crude production growth in 2019. The EIA also revised down its projected 2020 production figure.
"While the revision is small, the comforting part for bulls was that the direction of the revision was down rather than up," Harry Tchilinguirian, global oil strategist at BNP Paribas in London, told the Reuters Global Oil Forum.
Exports from Venezuela's main oil terminal have been stranded as its worst blackout on record has left parts of the country without power for roughly a week.
The terminal resumed operations by Wednesday, according to two sources and Refinitiv Eikon data, but shipments have not started up. Power has been restored to many parts of the country in recent days.
"I expect to see WTI hitting $60 a barrel in the next couple of weeks as inventories in the U.S. are impacted by the lack of Venezuelan imports," said Andrew Lipow, president of Lipow Oil Associates in Houston.
Oil prices have also received support from supply cuts led by the Organization of the Petroleum Exporting Countries and allies including Russia.
On Monday, Saudi Arabia, indicated it would cut April exports. Energy Minister Khalid al-Falih, the previous day, said the production-curbing agreement would likely last until at least June. - Reuters
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