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Oil Holds Near 3-Year Highs as Falling U.S. Crude Supplies Provide Support

Published 11/01/2018, 08:39
Updated 11/01/2018, 08:43
© Reuters.  Crude oil prices stay near 3-year highs
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Investing.com - Crude prices were largely unchanged near recent highs in early dealings on Thursday, drawing support from a report showing U.S. crude stockpiles declined for an eighth straight week.

U.S. West Texas Intermediate (WTI) crude futures tacked on 2 cents to $63.59 a barrel by 3:40AM ET (0840GMT), after gaining 1% a day earlier. It rose to its highest since Dec. 2014 at $63.67 on Wednesday.

Meanwhile, Brent crude futures, the benchmark for oil prices outside the U.S., were at $69.13 a barrel, down 7 cents from their last close. The contract edged up 0.6% in the prior session after rallying to its best level since May 2015 at $69.37.

The U.S. Energy Information Administration said in its weekly report Wednesday that crude oil inventories fell by 4.9 million barrels in the week ended Jan. 5. That compared with analysts' expectations for a decline of 3.9 million barrels.

Total U.S. crude oil inventories stood at 419.5 million barrels as of last week, slightly below the five-year average of just over 420 million barrels.

The report also showed that U.S. crude oil production fell by 290,000 barrels per day (bpd) to 9.49 million bpd.

Oil prices have added around 13% since early December, benefiting from production cut efforts led by the Organization of the Petroleum Exporting Countries and Russia. The producers agreed in December to extend current oil output cuts until the end of 2018.

The deal to cut oil output by 1.8 million barrels a day (bpd) was adopted last winter by OPEC, Russia and nine other global producers. The agreement was due to end in March 2018, having already been extended once.

In other energy trading, gasoline futures dipped 0.1%, to $1.831 a gallon, while heating oil shed 0.1% to $2.078 a gallon.

Natural gas futures jumped 2.4 cents, or 0.8%, to $2.930 per million British thermal units, as traders looked ahead to weekly storage data due later in the global day amid expectations for a withdrawal of 318 billion cubic feet.

That would surpass the record draw of 287 billion cubic feet in the week ended Jan. 10, 2014. The five-year average change for the week is a decline of 170 billion cubic feet.

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