Oil prices recover as weekly U.S. crude inventories fall

Saudi oil minister Khalid al-Falih last week suggested that discussions could include actions to stabilize prices – widely seen as a suggestion that OPEC could revive talks on trimming high output levels.

Many of the OPEC members, such as Nigeria, Venezuela, Algeria, Gabon, and Angola are suffering from the lower oil price, yet the organization hasn’t taken up steps to improve the oil market balance and that puts serious doubts whether it is driving for a common good or not.

US crude settled at $48.22, up 3.06 percent after touching a session high of $48.38, the highest since July 5.

Traders said the price falls were the result of cashing in following more than two weeks of rallying prices.

The dollar index, which measures the greenback against six major peers, was down 0.87 percent at 94.799 in late trading Tuesday.

On the New York Mercantile Exchange, WTI crude for September delivery traded between $46.63 and $48.38 a barrel before closing at $48.17, up 1.38 or 2.88% on the session.

At 1549 BST, Brent crude rose 0.12% to $49.29 per barrel while West Texas Intermediate fell 0.38% to $46.40 per barrel.

A weaker dollar also supported crude prices, as did the loss of more than 700,000 barrels per day (bpd) in Nigerian output to militant attacks and pipeline problems.

“One certain thing to be aware of is the Reuters report that Saudis may increase production to new record highs pushing near 11 million barrels per day”, said Tariq Zahir, trader in crude oil spreads at Tyche Capital Advisors in NY.

WTI crude oil prices moved higher on Wednesday following the larger than expected draw in both crude oil and gasoline inventories.

Futures gained 0.4 percent in NY after climbing more than 12 percent over the previous five sessions.

Talks on a production freeze between Russia, OPEC, and other oil producers broke down in April, after the Saudis demanded that rival Iran be part of the deal.

IG Markets´ Melbourne-based analyst Angus Nicholson said there were “concerns that Saudi Arabia may continue producing oil at their summer output levels rather than following their usual seasonal slowing of production”.

In June, crude oil used to generate power rose to 704,000 bpd from 660,000 bpd in May, the JODI data showed, as electricity consumption typically soars in the hot summer months when air conditioning use peaks.