Oil rises on expected United States crude stocks draw

Crude oil futures continued to rise Wednesday morning, extending a late-year rally after industry data showed a large drawdown in USA oil inventories. The U.S. benchmark price for oil, West Texas Intermediate, was up 0.3 percent to open in NY at $53.45 per barrel. The US West Texas Intermediate crude also rose and traded at 53.53 each barrel. U.S. field production of crude oil was 9.627 million bpd in April 2015, and has dropped to 8.58 million bpd in September of this year, data from the U.S. Energy Information Administration (EIA) shows.

Oil prices edged down on Monday due to a renewed dollar rally but were still supported at levels of around $55 per barrel on the back of delays in new Libyan oil exports and expectations of tighter supplies going into 2017.

Indications surfaced early in the week that US crude oil stockpiles were dwindling in a short-term sign of fading supply-side pressures.

Oil prices edged higher Tuesday as coming cutbacks from some of the world’s biggest producers keep supporting the market when trading is light because of the holidays.

Allison Holland, IMF mission chief in Oman, said the OPEC deal would help reduce excess supply in the market, and has already resulted in a significant increase in oil prices which could boost revenue for Oman.

Robbie Fraser, commodity analyst at Schneider Electric, said indications of a ramp up by USA shale producers is capping oil’s recent gains. The draw was larger than the consensus estimate for a draw of around 2.4 million barrels. Non-OPEC producers including Russian Federation will also trim supply.

USA crude imports rose last week by 1.039 MMbpd.

Speculators raised their holdings of Brent crude oil futures to a record high last week.

Fog in recent weeks in the Gulf of Mexico had been keeping a lot of offshore tankers from unloading their crude, but weather has been clearing up recently allowing that oil to come into onshore storage, said Matt Smith, director of commodity research at ClipperData.

Crude oil prices bottomed out in early 2016. Distillate fuel and propane stocks also fell.

Europe’s index of leading 300 shares was down 0.8 percent at 1,340 points, Germany’s DAX was down 1 percent and sterling’s strength drove Britain’s FTSE 100 down 1.3 percent.