LONDON, March 16 — Oil extended gains above US$49 (RM217) a barrel as US government data showed an unexpected fall in crude stockpiles, the first decline this year.
Futures rose as much as 1.6 per cent in New York after advancing 2.4 per cent yesterday, snapping a seven-session decline. Crude stockpiles dropped by 237,000 barrels last week, according to an Energy Information Administration report. A Bloomberg survey had forecast a 10th weekly expansion. Iraq plans to increase output to 5 million barrels a day by the end of 2017, Oil Minister Jabbar Al-Luaibi said at a news conference in the southern city of Basra.
Oil last week broke below US$50 a barrel for the first time since December as rising US supply countered output reductions by members of the Organisation of Petroleum Exporting Countries and other nations. While an OPEC report on Tuesday showed Saudi Arabia’s production climbed back above 10 million barrels a day in February, it still remains below a ceiling set under the six-month cut deal that started on January 1.
“Oil bulls will have breathed a collective sigh of relief yesterday as the stubborn climb of US crude stockpiles into record territory came to an unexpected halt,” said Stephen Brennock, an analyst at PVM Oil Associates Ltd. in London.
West Texas Intermediate for April delivery rose as much as 76 cents to US$49.62 a barrel on the New York Mercantile Exchange and was at US$49.41 at 10.08am in London. Total volume traded was in line with the 100-day average. Prices climbed US$1.14 to close at US$48.86 yesterday after falling almost 11 per cent the previous seven sessions.
Brent for May settlement advanced as much as 84 cents, or 1.6 per cent, to US$52.65 a barrel on the London-based ICE Futures Europe exchange. Prices rose 89 cents to US$51.81 yesterday. The global benchmark crude was at a premium of US$2.48 to May WTI.
US crude inventories fell from the highest level in more than three decades to 528.2 million barrels, the EIA said in a report yesterday. Oil production rose for a fourth week to 9.1 million barrels a day.
Iraq exported 3.87 million barrels a day from its southern and northern shipment hubs in February, Oil Ministry spokesman Asim Jihad said in an emailed statement. China’s in talks with Saudi Arabia for its sovereign wealth fund and largest energy company to invest in the initial public offering of the Middle East nation’s state oil producer, according to people with knowledge of the matter. Oil markets are still struggling to clear a surge in supply from Opec at the end of last year, according to an International Energy Agency report yesterday. — Bloomberg