Oil Reaches Highest Since Late 2014 After US Surplus Shrinks
(Bloomberg) -- Crude settled at the highest since 2014 as shrinking U.S. oil, gasoline and diesel stockpiles signaled tightening global supplies.
Futures ended Wednesday’s session 0.3 percent higher in New York after fluctuating between gains and losses. An International Energy Agency forecast for less robust energy demand overshadowed a U.S. government tally showing record overseas demand for American crude and declining domestic stockpiles of oil and fuels.
“People are starting to wonder if we are going to see a very tight market during the summer when the driving season really hits” in North America, said Michael Lynch, president of Strategic Energy & Economic Research in Winchester, Massachusetts.
Crude this month climbed to levels not seen in more than three years as global markets tightened and geopolitical tensions in the Middle East heightened supply concerns. Despite surging U.S. crude production, surpluses stored in terminals and tankers have been shrinking.
“Another week of draws across the board is certainly positive for current prices,” said Matthew Beck, managing director of an $8 billion oil and natural gas portfolio at John Hancock Financial Services Inc. in Boston. The continued withdrawals “reflect a fairly tight market.”
West Texas Intermediate crude for June delivery edged up 18 cents to settle at $71.49 a barrel on the New York Mercantile Exchange.
Brent for July settlement rose 85 cents to end the session at $79.28 on the London-based ICE Futures Europe exchange. The global benchmark crude traded at a $7.72 premium to WTI for July, the largest for the front-month spread since 2015.
The U.S. Energy Information Administration said crude stockpiles fell by 1.4 million barrels last week. At the same time, gasoline stockpiles shrank by 3.79 million and distillates fell by 92,000. Helping to contribute to the crude draw was a 689,000 barrel-a-day jump in exports.
Aside from lowering its demand outlook, the Paris-based IEA said production outside OPEC will grow by 1.87 million barrels a day this year, or 85,000 a day more than previously thought.
“We saw some expectations for demand actually come down a little bit. That’s just due to higher crude oil prices and the thought that that might curb gasoline demand a little bit globally,” said Brian Kessens, who helps manage $16 billion in energy assets at Tortoise.
Oil-market news:
Gasoline futures rose 2.1 percent to settle at $2.2499 a gallon, the highest since October 2014. The compliance rate for the 10 non-OPEC nations participating in production cuts fell to 73 percent in April versus a revised 79 percent in March, according to Bloomberg calculations from preliminary IEA data on crude output.
To contact the reporter on this story: Jessica Summers in New York at jsummers24@bloomberg.net. To contact the editors responsible for this story: Reg Gale at rgale5@bloomberg.net Joe Carroll, Carlos Caminada.
WHAT DO YOU THINK?
Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.
- Japan Failing to Meet Corporate Demand for Clean Power: Amazon
- Russian Navy Enters Warship-Crowded Red Sea Amid Houthi Attacks
- Libya's Surprise Oil Minister Change Throws Spotlight on Output
- Oman Sees Increasing Ship-to-Ship Transfers of Russian Oil Bound for India
- Ithaca Energy Studies Deal for Eni's UK Upstream Assets
- Falcon Oil Declares Commercial Flow Test Results for Shenandoah Well
- Japan Failing to Meet Corporate Demand for Clean Power: Amazon
- Macquarie Strategists Expect Brent Oil Price to Grind Higher
- UK Oil Regulator Publishes New Emissions Reduction Plan
- PetroChina Posts Higher Annual Profit on Higher Production
- McDermott Settles Reficar Dispute
- US, SKorea Launch Task Force to Stop Illicit Refined Oil Flows into NKorea
- Pennsylvania County Joins List of Local Govts Suing Big Oil over Climate
- Russian Navy Enters Warship-Crowded Red Sea Amid Houthi Attacks
- USA Commercial Crude Oil Inventories Increase
- New China Climate Chief Says Fossil Fuels Must Keep a Role
- Equinor Makes Discovery in North Sea
- Standard Chartered Reiterates $94 Brent Call
- India Halts Russia Oil Supplies From Sanctioned Tanker Giant
- DOI Announces Proposal for Second GOM Offshore Wind Auction
- Centcom, Dryad Outline Recent Moves Around Red Sea Region
- PetroChina Set to Receive Venezuelan Oil
- Czech Conglomerate to Buy Major Stake in Gasnet for $917MM
- US DOE Offers $44MM in Funding to Boost Clean Power Distribution
- Oil Settles Lower as Stronger Dollar Offsets Tighter Market
- Chinese Mega Company Makes Major Oilfield Discovery
- VIDEO: Missile Attack Kills Crew Transiting Gulf of Aden
- Norway Regulator Blasts Proposal to Halt New Oil and Gas Permits
- Chinese Mega Company Makes Another Major Oilfield Discovery
- What Is the Biggest Risk to Offshore Oil and Gas Personnel in 2024?
- New China Climate Chief Says Fossil Fuels Must Keep a Role
- Vessel Sinks in Red Sea After Missile Strike
- Exxon Rights in Stabroek Do Not Apply to Hess Merger with Chevron: Hess
- Analysts Reveal Latest Oil Price Outlook Following OPEC+ Cut Extension
- Equinor Makes Discovery in North Sea