Oil prices rally on inventory data

On the ICE Futures Exchange in London, Brent oil for November delivery dipped 25 cents, or 0.55%, to trade at $45.70 a barrel by 4:35AM ET (08:35GMT), not far from a six-week low of $45.31.

Global benchmark Brent crude futures LCOc1 were also up, gaining 27 cents from their last close to $47.10 per barrel.

Crude prices rallied after data released by the U.S. Energy Information Administration Wednesday showed a bigger- than-expected 6.2-million barrel drawdown in domestic crude stockpiles for the week ended September 16. The Genscape report, coming on top of a build of 526,000 barrels at Cushing reported by the EIA for the week ended September 16, suggested that total US stockpiles may start climbing again soon.

Bjarne Schieldrop, chief commodities analyst at Nordic bank SEB, said in a note today: “We see no chance of a production freeze agreement materialising”.

West Texas Intermediate, the USA benchmark price for crude oil, was up 1.9 percent to open the day at $44.91 per barrel. The refinery utilization rate reached 92%.

Analysts say the global market still remains oversupplied. The API report pushed oil prices up, offsetting the news of renewed Libyan oil exports from the port of Ras Lanuf and Nigeria’s plans to start ramping up its oil production.

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“It’s still early days before the talks in Algiers, but the meeting in Vienna proves the difficulty that archrivals Saudi Arabia and Iran have in agreeing to an oil production accord”, said Tariq Zahir, crude futures trader at Tyche Capital Advisors in NY.

Libya’sNational Oil Corp.is also urging anti-government military groups to unblock the Sharara and El Feel oil fields immediately.

“But with Russian Federation pumping oil at record levels of 11 million barrels per day, an OPEC cutback would have only a minimal impact on global supply”, he said.

“It is time to let Libya’s oil flow freely and get Libya back on its feet”, the statement said.

While it remains a remote possibility, OPEC could agree to impose production caps at their informal meeting next week, Weinstein said.

Gasoline futures rose 1.34 cents, or 0.96%, to $1.4124 a gallon. A decision by OPEC could put pressure on prices, and the price of Brent crude, the worldwide oil benchmark, could jump by a few dollars.