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Oil prices jump after surprise U.S. stock draw

Reuters  |  TOKYO 

By Aaron Sheldrick and Osamu Tsukimori

TOKYO (Reuters) - prices rebounded from three-month lows on Wednesday after industry data showed a surprise drawdown in U.S. crude stockpiles and as put a positive spin on OPEC's compliance with output cuts.

U.S. West Texas Intermediate crude was trading up 81 cents, or 1.7 percent, at $48.53 a barrel by 0749 GMT. That came after the contract fell for a seventh session on Tuesday in its longest losing streak since January 2016.

Brent futures were up 71 cents, or 1.4 percent, at $51.63, after settling down 43 cents at $50.92 on Tuesday, their lowest finish since November.

U.S. crude stocks fell by 531,000 barrels last week, industry group the American Petroleum Institute said on Tuesday after settlement. [API/S]

That compared with analyst expectations for an increase of 3.7 million barrels. If the draw is confirmed by government data on Wednesday, it would be the first drawdown after nine consecutive builds.

U.S. gasoline and distillate inventories drew more than expected, the data also showed.

tumbled on Tuesday after OPEC reported a rise in crude stocks and a surprise output jump from its biggest member, Saudi Arabia, further pressuring prices that have erased nearly all of their gains since OPEC announced output cuts in November.

Secondary sources had said Saudi output fell in February to 9.797 million barrels per day (bpd), but Riyadh told OPEC it rose to 10.011 million bpd.

In an effort to dispel market concerns, the Saudi energy ministry said the "difference between what the market observes as production, and the actual supply levels in any given month, is due to operational factors that are influenced by storage adjustments and other month-to-month variables."

Influential U.S. investment bank cast a positive light on the numbers, saying compliance with production cuts remains high. Market rebalancing is still progressing and the bank expects demand for to finally exceed supply next quarter.

"Our expectations that inventories will draw through 2017 therefore leads us to expect that Brent timespreads will continue to strengthen with the forward curve in backwardation by 3Q17," Goldman said in its research note.

OPEC's monthly report said stocks in industrialised nations rose in January to 278 million barrels above the five-year average, with U.S. shale and other non-OPEC supply gaining.

(Reporting by Aaron Sheldrick and Osamu Tsukimori; Editing by Richard Pullin and Joseph Radford)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

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Oil prices jump after surprise U.S. stock draw

TOKYO (Reuters) - Oil prices rebounded from three-month lows on Wednesday after industry data showed a surprise drawdown in U.S. crude stockpiles and as Goldman Sachs put a positive spin on OPEC's compliance with output cuts.

By Aaron Sheldrick and Osamu Tsukimori

TOKYO (Reuters) - prices rebounded from three-month lows on Wednesday after industry data showed a surprise drawdown in U.S. crude stockpiles and as put a positive spin on OPEC's compliance with output cuts.

U.S. West Texas Intermediate crude was trading up 81 cents, or 1.7 percent, at $48.53 a barrel by 0749 GMT. That came after the contract fell for a seventh session on Tuesday in its longest losing streak since January 2016.

Brent futures were up 71 cents, or 1.4 percent, at $51.63, after settling down 43 cents at $50.92 on Tuesday, their lowest finish since November.

U.S. crude stocks fell by 531,000 barrels last week, industry group the American Petroleum Institute said on Tuesday after settlement. [API/S]

That compared with analyst expectations for an increase of 3.7 million barrels. If the draw is confirmed by government data on Wednesday, it would be the first drawdown after nine consecutive builds.

U.S. gasoline and distillate inventories drew more than expected, the data also showed.

tumbled on Tuesday after OPEC reported a rise in crude stocks and a surprise output jump from its biggest member, Saudi Arabia, further pressuring prices that have erased nearly all of their gains since OPEC announced output cuts in November.

Secondary sources had said Saudi output fell in February to 9.797 million barrels per day (bpd), but Riyadh told OPEC it rose to 10.011 million bpd.

In an effort to dispel market concerns, the Saudi energy ministry said the "difference between what the market observes as production, and the actual supply levels in any given month, is due to operational factors that are influenced by storage adjustments and other month-to-month variables."

Influential U.S. investment bank cast a positive light on the numbers, saying compliance with production cuts remains high. Market rebalancing is still progressing and the bank expects demand for to finally exceed supply next quarter.

"Our expectations that inventories will draw through 2017 therefore leads us to expect that Brent timespreads will continue to strengthen with the forward curve in backwardation by 3Q17," Goldman said in its research note.

OPEC's monthly report said stocks in industrialised nations rose in January to 278 million barrels above the five-year average, with U.S. shale and other non-OPEC supply gaining.

(Reporting by Aaron Sheldrick and Osamu Tsukimori; Editing by Richard Pullin and Joseph Radford)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

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Business Standard
177 22

Oil prices jump after surprise U.S. stock draw

By Aaron Sheldrick and Osamu Tsukimori

TOKYO (Reuters) - prices rebounded from three-month lows on Wednesday after industry data showed a surprise drawdown in U.S. crude stockpiles and as put a positive spin on OPEC's compliance with output cuts.

U.S. West Texas Intermediate crude was trading up 81 cents, or 1.7 percent, at $48.53 a barrel by 0749 GMT. That came after the contract fell for a seventh session on Tuesday in its longest losing streak since January 2016.

Brent futures were up 71 cents, or 1.4 percent, at $51.63, after settling down 43 cents at $50.92 on Tuesday, their lowest finish since November.

U.S. crude stocks fell by 531,000 barrels last week, industry group the American Petroleum Institute said on Tuesday after settlement. [API/S]

That compared with analyst expectations for an increase of 3.7 million barrels. If the draw is confirmed by government data on Wednesday, it would be the first drawdown after nine consecutive builds.

U.S. gasoline and distillate inventories drew more than expected, the data also showed.

tumbled on Tuesday after OPEC reported a rise in crude stocks and a surprise output jump from its biggest member, Saudi Arabia, further pressuring prices that have erased nearly all of their gains since OPEC announced output cuts in November.

Secondary sources had said Saudi output fell in February to 9.797 million barrels per day (bpd), but Riyadh told OPEC it rose to 10.011 million bpd.

In an effort to dispel market concerns, the Saudi energy ministry said the "difference between what the market observes as production, and the actual supply levels in any given month, is due to operational factors that are influenced by storage adjustments and other month-to-month variables."

Influential U.S. investment bank cast a positive light on the numbers, saying compliance with production cuts remains high. Market rebalancing is still progressing and the bank expects demand for to finally exceed supply next quarter.

"Our expectations that inventories will draw through 2017 therefore leads us to expect that Brent timespreads will continue to strengthen with the forward curve in backwardation by 3Q17," Goldman said in its research note.

OPEC's monthly report said stocks in industrialised nations rose in January to 278 million barrels above the five-year average, with U.S. shale and other non-OPEC supply gaining.

(Reporting by Aaron Sheldrick and Osamu Tsukimori; Editing by Richard Pullin and Joseph Radford)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

image
Business Standard
177 22