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Oil Prices Tick Higher, Supported by Drawdown in U.S. Product Stocks

Published 01/02/2018, 08:53
Updated 01/02/2018, 08:56
© Reuters.  Oil prices tick higher
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Investing.com - Crude prices ticked higher on Thursday, drawing support from a report showing a sizable decline in U.S. stocks of gasoline and distillate supplies.

U.S. West Texas Intermediate (WTI) crude futures tacked on 24 cents, or 0.4%, to $64.97 a barrel by 3:50AM ET (0850GMT). On Wednesday, the U.S. benchmark rose 23 cents to $64.73 a barrel.

Meanwhile, Brent crude futures, the benchmark for oil prices outside the U.S., advanced 12 cents, or roughly 0.2%, to $69.01 a barrel, after gaining 37 cents a day earlier.

Oil prices ended higher on Wednesday, as data from the Energy Information Administration showed strong U.S. demand for gasoline and distillates along with weekly declines in domestic supplies of the petroleum products.

The EIA, however, also reported that U.S. crude supplies rose 6.8 million barrels last week, which marked the first increase in 11 weeks.

The report also showed that U.S. crude oil production edged up by 41,000 barrels per day (bpd) to 9.919 million bpd, the highest level since the early 1970s and close to the output of top producers Russia and Saudi Arabia.

Analysts and traders have recently warned that U.S. shale oil producers could ramp up production as they look to take advantage of higher prices, potentially derailing OPEC's effort to curb excess supply.

Oil prices have risen almost 55% from around $43 a barrel in June, 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 rose 0.3% to $1.900 a gallon, while heating oil added 0.4% to $2.073 a gallon.

Natural gas futures sank 5.8 cents, or 2%, to $2.937 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 104 billion cubic feet.

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