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Oil Ticks Higher on Bets for Drop in U.S. Crude Supplies

Published 07/02/2018, 08:35
Updated 07/02/2018, 08:47
© Reuters.  Oil edges higher on report of lower U.S. crude inventories
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Investing.com - Crude prices ticked higher on Wednesday, amid speculation weekly supply data due later in the day will show a decline in U.S. oil and fuel supplies.

The U.S. Energy Information Administration will release its official weekly oil supplies report for the week ended Feb. 2 at 10:30AM ET (1530GMT).

After markets closed Tuesday, the American Petroleum Institute said that U.S. oil inventories fell by 1.1 million barrels last week, compared with analysts' expectations for a gain of 3.1 million barrels.

The API report also showed a drop of 227,000 barrels in gasoline stocks, while distillate stocks, which include motor diesel and heating oil, rose by about 4.6 million barrels.

There are often sharp divergences between the API estimates and the official figures from EIA.

U.S. West Texas Intermediate (WTI) crude futures tacked on 30 cents, or 0.5%, to $63.67 a barrel by 3:35AM ET (0835GMT). The U.S. benchmark slumped 76 cents, or 1.2%, in the last session, after touching its lowest level since Jan. 19 at $63.12.

Meanwhile, Brent crude futures, the benchmark for oil prices outside the U.S., inched up 34 cents, or roughly 0.5%, to $67.19 a barrel, after hitting its lowest level in more than a month a day earlier.

Oil settled lower for the third session in a row on Tuesday weighed down by the recent stock-market rout and as traders weighed a steady increase in U.S. output against OPEC's ongoing efforts to drain the market of excess supplies.

U.S. crude oil production, driven by shale extraction, has rebounded by almost 20% since the most recent low in mid-2016 to around 10 million barrels per day, the highest level since the early 1970s and close to the output of top producers Russia and Saudi Arabia.

In other energy trading, gasoline futures held steady at $1.821 a gallon, while heating oil was little changed at $1.990 a gallon.

Natural gas futures ticked up 1.6 cents, or 0.6%, to $2.776 per million British thermal units.

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