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Oil steady, near three-year highs on Syria tensions, tighter supply

Reuters  |  NEW YORK 

By Ayenat Mersie

NEW YORK (Reuters) - prices held steady on Thursday, remaining close to highs last reached in late 2014 on tensions over and shrinking global inventories.

Brent crude futures settled at $72.02 a barrel, down 4 cents. U.S. WTI crude futures were up 25 cents at $67.07. Prices for both climbed in post-settlement trading.

"We're pretty much holding steady on yesterday's gains ... and it does look like there's further upside ahead," said Walter Zimmerman, at United- "People are still nervous about what's going to happen in ... nothing was solved overnight."

prices jumped on Wednesday to their highest level since late 2014 after said it intercepted missiles over and U.S. warned of military action in Syria, both of which raised concerns about possible supply disruptions.

Some fundamental signals also supported prices. The Organization of the Petroleum Exporting Countries said the global stocks surplus was close to evaporating due to healthy demand and its own supply cuts.

The group is producing below its targets, meaning the world needs to use stocks to meet rising demand. OPEC said in its stocks in the developed world fell by 17.4 million barrels in February to 2.854 billion barrels, around 43 million barrels above the latest five-year average.

OPEC told in the global glut had effectively shrunk by nine-tenths since the start of 2017.

"We have seen an accelerated shrinkage of stocks in storage from unparalleled highs of about 400 million barrels to about 43 million above the five-year average," Barkindo said.

OPEC, and several other non-OPEC producers began trimming supply in January 2017. Their pact runs until the end of the year and OPEC meets in June to decide on its next course of action.

"There is growing confidence that the declaration of cooperation will be extended beyond 2018," Barkindo told "will continue to play a leading role."

These bullish factors more than offset pressure from a report showing crude inventories rose by 3.3 million barrels, while production hit a record 10.53 million barrels per day (bpd).

Still, analysts were waiting for further fundamental signals. "This all depends on whether demand will be as strong as it is projected to be," said Gene McGillian, at Tradition in Stamford.

(Additional reporting by and in London; Henning Gloystein in Singapore; Editing by David Gregorio, and Susan Thomas)

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

First Published: Fri, April 13 2018. 01:59 IST
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