From Bloomberg
Crude jumped to the highest in more than two weeks after a U.S. government report showed oil stockpiles in the world’s largest economy fell by the most in four months.
Futures advanced 0.9 percent in New York. American crude inventories tumbled by 6.5 million barrels last week, more than double the average estimate in a Bloomberg survey. Exports surged by the most on record as domestic explorers sent cargoes to foreign shores where they fetched higher prices.
“Crude inventories are just taking a nose-dive,” Matt Sallee, who helps manage $16 billion in oil-related assets at Tortoise Capital Advisors LLC, said by telephone. The price gap that’s making American oil more attractive to overseas buyers is “supporting pretty robust exports.”
Yet, gasoline stockpiles rose for a sixth week and diesel supplies unexpectedly edged higher.
Oil is on track for a yearly rise following a decision by the Organization of Petroleum Exporting Countries and its allies to extend supply cutbacks through the end of 2018. Global stockpiles will remain below seasonal levels and continue to shrink through the second quarter of next year, according to Goldman Sachs Group Inc.
Saudi Arabian Oil Minister Khalid Al-Falih said that he’s optimistic about the global oil-cuts pact, yet he also said that oil inventories won’t be near the level needed by the time OPEC meets in June. Meanwhile, Kuwait’s Oil Minister Bakheet Al-Rashidi said compliance with the output cuts reached 122 percent in November, the highest monthly level since the agreement took effect in January.
West Texas Intermediate crude for February delivery added 53 cents to settle at $58.09 a barrel on the New York Mercantile Exchange.
Brent for February settlement gained 76 cents to end the session at $64.56 on the London-based ICE Futures Europe exchange. The global benchmark crude traded at a premium of $6.47 to WTI.
U.S. crude inventories slipped to 436.5 million barrels last week, the lowest level since October 2015, while crude exports jumped by 772,000 barrels a day, the Energy Information Administration said on Wednesday.
The data “confirms that inventory levels are declining at an exceedingly high rate,” Adam Wise, who oversees an $8 billion energy portfolio at John Hancock Financial Services Inc. in Boston, said by telephone. “The global economy is doing well and you’re seeing strong demand.”
Meanwhile, gasoline stockpiles climbed 1.24 million barrels, and distillate supplies increased by 769,000 barrels, more than triple what was forecast in a Bloomberg survey. Crude production remained at a record-high.
