Futures in New York are set for a 1.4 percent advance this week. U.S. government data showed crude inventories rose less than expected last week as imports dropped the most since November. The slowdown in the expansion of record stockpiles and shipments from overseas into America may signal the production cuts by Organization of Petroleum Exporting Countries are starting to tighten supplies globally.
“The sharp decline in the pace of builds was driven by lower imports,” said Amrita Sen, chief oil analyst Energy Aspects in London.
Analysts from Goldman Sachs Group Inc. to Energy Aspects Ltd. have said U.S. stockpiles were boosted by deliveries of crude purchases made before OPEC and other nations started cutting output in January. While the inventory expansion, which has kept prices in a tight range above $50 this year, slowed last week, Citigroup Inc. says the glut OPEC members created by boosting output just prior to their December deal means they will need to prolong their cuts beyond June.
West Texas Intermediate for April delivery was at $54.15 a barrel, down 30 cents, on the New York Mercantile Exchange as of 9:57 a.m. in London. Prices on Thursday rose 86 cents to close at $54.45, the highest settlement since July 2, 2015. Total volume traded was about 30 percent below the 100-day average.
Brent for April settlement dropped 34 cents to $56.24 a barrel on the London-based ICE Futures Europe exchange. The contract advanced 74 cents to $56.58 on Thursday and is headed for a 0.8 percent gain this week. The global benchmark crude traded at a $2.09 premium to WTI.
Crude stockpiles climbed by 564,000 barrels last week to 518.7 million barrels, the U.S. Energy Information Administration reported on Thursday. While total inventories are at the highest in weekly data going back to 1982, the increase trailed a 3.25 million-barrel gain projected by analysts surveyed by Bloomberg and is the smallest build this year.
Supplies at Cushing, Oklahoma, the biggest U.S. storage hub and the delivery point for WTI, dropped by 1.53 million barrels, the steepest decline since October of last year.
Crude imports to the U.S. fell 14 percent to an average 7.29 million barrels a day for the week ended Feb. 17, compared with 8.49 million barrels in the previous week, according to preliminary EIA data. Oil exports from the world’s biggest economy surged to a record and domestic production rose to 9 million barrels a day last week.
OPEC and its partners have achieved 86 percent of their agreed cuts, according to a January technical report, delegates familiar with the matter said. The group’s Joint Technical Committee submitted its report to the Joint Ministerial Monitoring Committee, which oversees compliance.
- While Saudi Arabia has said oil giant Aramco is worth more than $2 trillion, industry executives, analysts and investors told Bloomberg their analysis — based on oil reserves and cash flow projections under different tax scenarios — suggests the company is worth no more than half, and maybe as little as a fifth, of that amount.
- OPEC pumped at will the past two years to defend its turf against rivals. Its recent volte-face has left it contending with additional threats in the world’s biggest oil market. Crude that’s rarely or never-before seen coming to Asia is now sailing from all over the globe to the region.