JANUARY 10, 2018 – Oil popped in after-hours trading as an industry report showed the biggest draw in U.S. crude stockpiles for this time of year since 1999.
“Inventory trends have been very bullish,” Kyle Cooper, director of research at IAF Advisors in Houston, said by telephone. “Despite the EIA’s forecast for record oil production this year and next year again, there’s obviously still very healthy demand for crude.”
Oil in New York has traded above $60 a barrel and the international benchmark Brent has held above $66 since December as OPEC and allied suppliers capped output and pledged to do so for the remainder of the year. Yet, higher prices could spur a bounce in U.S. crude production. The Energy Information Administration increased its forecast for American crude output this year to a fresh record-high of 10.27 million barrels a day.
West Texas Intermediate for February delivery advanced to $63.43 a barrel at 4:45 p.m. after settling at $62.96 a barrel on the New York Mercantile Exchange.
Brent for March settlement climbed $1.04 to end the session at $68.82 on the London-based ICE Futures Europe exchange. The global benchmark crude traded at a premium of $5.95 to March WTI.
U.S. crude stockpiles at the Cushing, Oklahoma, pipeline hub probably fell by 1.5 million barrels last week, according to a forecast compiled by Bloomberg. Inventories at Cushing dipped below 50 million barrels through the week ended Dec. 29, the first time they have dropped below that level since February 2015, according to the most recent Energy Information Administration data.
The API report was also said to show that Cushing stockpiles fell by 2.52 million barrels last week. Gasoline inventories climbed by 4.34 million barrels and distillate supplies increased by 4.69 million.
“Production cuts and demand are continuing to rebalance the market,” Gene McGillian, a market research manager at Tradition Energy in Stamford, Connecticut, said by telephone.