New York, US (BBN) – Crude oil prices held overnight gain into Asia on Thursday as investors mulled assurances on OPEC compliance with an output cut and noted a surprise draw in US inventories.
On the New York Mercantile Exchange, West Texas Intermediate crude for April rose 0.47 per cent to $49.09 a barrel, while on London’s Intercontinental Exchange global benchmark Brent for May delivery was quoted up 0.12 per cent to $52.05 a barrel, reports
US crude inventories fell by 240,000 barrels by the end of last week, the US energy Information Administration (EIA) said Wednesday, compared to an expected 3.2 million barrels gain.
Gasoline inventories fell by 3.1 million barrels, while distillates dropped 4.2 million barrels, compared with declines of 1.98 million barrels and 1.5 million barrels respectively.
The crude draw was less than the American Petroleum Institute (API) estimate of a 530,000 barrels drop.
Overall, crude inventories at 528.2 million barrels are 7.3 per cent higher than year-ago levels, and the storage hub at Cushing, Oklahoma, recorded a build of 2.13 million barrels.
Sentiment improved following a sharp sell-off on Tuesday as the Paris-based International Energy Agency (IEA) said the global crude oil market is headed for a deficit of supply against demand in the first half of the year if a coordinated pact to curb output to the market holds until the end of June.
“If current production levels were maintained to June when the output deal expires, there is an implied market deficit of 500,000 (barrels per day) bpd for 1H17, assuming, of course, nothing changes elsewhere in supply and demand,” the IEA said in its latest monthly report, covering February.
“For those looking for a re-balancing of the oil market the message is that they should be patient, and hold their nerve.”
Elsewhere, Saudi Arabia’s energy ministry said Wednesday the amount of crude that reached the market in February was 9.90 million barrels a day (bpd), down from 9.99 million bpd in January, as it moved to explain figures that showed it pumped 10.011 million bpd in the month.
The ministry then clarified the figures both parse and amplify a central point of coordinated pact by OPEC and non-OPEC nations to trim nearly 1.8 million bpd from global markets in the first six months of the year – the goal is an average over the period and represents oil for sale, not supplies placed in storage or used domestically.
“The difference between what the market observes as production, and the actual supply levels in any given month, is due to operational factors that are influenced by storage adjustments and other month to month variables,” the ministry statement said.
“Saudi Arabia assures the market that it is committed and determined to stabilising the global oil market by working closely with all other participating OPEC and non-OPEC producers.”
Kuwait is scheduled to host a ministerial meeting on March 26 comprising both OPEC and non-OPEC members to review compliance with the output agreement and to discuss whether cuts would be extended beyond June.