Oil Set for Third Weekly Gain
(Bloomberg) -- Oil’s poised for a third weekly advance, buoyed by the biggest drop in American crude stockpiles since July at a time when the OPEC+ coalition is pressing on with its output curbs.
Futures were little changed in New York, after climbing above $60 a barrel on Wednesday for the first time since November. U.S. government data showed an unexpected 9.59 million-barrel withdrawal in nationwide inventories last week. OPEC and its allies earlier this week reaffirmed an intent to continue their supply cuts until at least June, when they’ll meet to discuss prolonging the efforts to avoid a global glut.
Crude’s holding on to its rally after hitting a new high for the year this week. The Organization of Petroleum Exporting Countries and its allies continued to show their commitment to bring the market into balance in the face of surging American shale production. While disruptions in Venezuela and Iran have also squeezed supplies, uncertainty surrounding ongoing trade talks between the U.S. and China is keeping investors wary.
“The big withdrawal of U.S. crude stockpiles indicates that demand is healthy, which has kept prices buoyed this week,” Ahn Yea Ha, a commodities analyst at Kiwoom Securities Co., said by phone from Seoul. “But more importantly, OPEC’s continued commitment to cap production is working and prices are expected to stay near $60 a barrel for the time being.”
West Texas Intermediate for May delivery was at $59.97 a barrel, down 1 cent, on the New York Mercantile Exchange at 7:21 a.m. in London. Prices are up 2.5 percent this week after gaining 4.9 percent in the previous two weeks.
Brent for May settlement traded 4 cents higher at $67.90 a barrel on the London-based ICE Futures Europe exchange. It lost 0.9 percent on Thursday, dropping for the first time in four days. Prices are up 1.1 percent this week. The global benchmark crude was at a premium of $7.91 to WTI.
The U.S. Energy Information Administration showed crude stockpiles dropped to 439.5 million barrels last week, defying analysts forecasts for a 1.75-million-barrel increase. However, they are above the five-year average of 432 million barrels for this time of the year, suggesting growing shale output still risks undermining OPEC and its partners’ efforts to cap production.
America’s oil exports climbed to 3.39 million barrels a day, the second highest weekly rate on record since 1993, while imports from the world’s top crude supplier Saudi Arabia decreased by more than half and its shipments from Venezuela stopped altogether.
Earlier this week, Saudi Arabian Energy Minister Khalid Al-Falih said the OPEC+ remains committed to curbing output when the Joint Ministerial Monitoring Committee met on Monday. Still, Russia and Iraq, the coalition’s other major suppliers, suggested the group should monitor the market until May or June before making a decision on extending the cuts through the year as developments in Venezuela and Iran may influence supply.
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