Oil prices rise as US inventories fall

Oil prices rose further today as official data showed a much bigger than expected drop in US crude inventories, while OPEC said demand would pick up.
US benchmark West Texas Intermediate (WTI) for delivery in July won 62 cents to USD 60.76 a barrel compared with yesterday's close.
Brent North Sea crude for July gained 41 cents to stand at USD 65.29 in late London deals.
Oil prices had surged more than two dollars yesterday on expectations that the US inventory data would reveal a drop, leading traders to bank profits when the fall greatly exceeded forecasts.
The Department of Energy said commercial stockpiles of US crude slumped by 6.8 million barrels last week to 470.6 million. Analysts' consensus forecast had been for a drop of 1.45 million, according to Bloomberg.

A drop in US stockpiles is seen as an indicator of healthy demand in the world's top crude consumer, supporting global prices.

Dealers expect that a drawdown of the United States' burgeoning reserves during the summer months, coupled with a slowdown in its shale output, could whittle down excess global supplies.
British energy giant BP today confirmed that the US was the biggest producer of crude last year, overtaking Russia and Saudi Arabia.
In its Statistical Review looking back at 2014, BP said last year "highlights the continuing importance of the US shale revolution, with the US overtaking Saudi Arabia as the world's biggest oil producer and surpassing Russia as the world's largest producer of oil and gas", confirming findings by the International Energy Agency and analysts.

A surplus of US stocks, caused by oil extracted cheaply from shale rock, was a key reason oil prices collapsed by more than 50 per cent between June and January.
"We believe that only (if) US production starts to ease off, then we would be seeing improvements to the supply situation," said Daniel Ang, investment analyst at brokers Phillip Futures.
Elsewhere today, OPEC stuck to its forecast that oil demand will pick up this year but warned that over-supply may still keep a "ceiling" on crude prices, even as it kept on increasing its own output to a two-year high.