Oil Trims Weekly Drop as U.S. Production Falls Most Since 2013
(Bloomberg) -- Oil trimmed its biggest weekly decline in five months as investors weighed the largest drop in U.S. output since 2013 against a smaller-than-expected stockpile decline.
Futures rose as much as 1 percent in New York. Prices lost 4.8 percent Thursday after government data showed crude stockpiles fell 2.2 million barrels last week, less than the forecast 2.5 million barrel decline and the 6.7 million drop reported by the industry-funded American Petroleum Institute. U.S. production slumped 194,000 barrels a day, or 2.3 percent.
Oil has traded between $45 and $51 a barrel in June after almost doubling from a 12-year low in February amid supply disruptions and falling U.S. output. The recovery has prompted U.S. producers to begin returning drilling rigs to service, leading to speculation a decline in production will slow.
“We have been seeing pretty consistent declines in crude oil inventories and, with regards to that end of the market, that is pretty positive,” Angus Nicholson, a markets analyst in Melbourne at IG Ltd., said by phone. “Oil inventories declined a lot less than the API inventories number was predicting, and that may have disappointed the markets somewhat.”
West Texas Intermediate crude for August delivery rose as much as 45 cents to $45.59 a barrel on the New York Mercantile Exchange and traded at $45.52 at 9:59 a.m. Tokyo time. The grade fell $2.29 to settle at $45.14 on Thursday, the lowest since May 10. Total volume traded was about 32 percent below the 100-day average. Prices are down 7.1 percent this week, the biggest drop since February.
Brent for September settlement gained as much as 55 cents, or 1.2 percent, to $46.95 a barrel on the London-based ICE Futures Europe exchange. Prices dropped $2.40, or 4.9 percent, to $46.40 a barrel on Thursday. The global benchmark crude traded at a 66-cent premium to WTI for the same month.
To contact the reporter on this story: Stephen Stapczynski in Tokyo at sstapczynsk1@bloomberg.net. To contact the editors responsible for this story: Ramsey Al-Rikabi at ralrikabi@bloomberg.net, Aaron Clark
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