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Oil prices jump on US stock draw, easing production
[LONDON] Oil prices rose on Wednesday after US government data confirmed a big weekly drawdown in crude inventories and on signs that US oil production growth was levelling off after several years of sharp increases.
The US government's Energy Information Administration (EIA) said on Wednesday that US crude oil stocks fell 6.81 million barrels to 470.6 million last week, much more than a forecast drawdown of 1.72 million barrels.
The data largely confirmed a bullish report on Tuesday by the American Petroleum Institute (API) and suggested that the US oil market was rebalancing after many months of large surpluses.
"The report is squarely bullish due to the large crude oil inventory drawdown, which confirmed the API data from last night," said John Kilduff, partner at New York energy hedge fund Again Capital.
Brent crude prices rose US$1.48 to a two-week high of US$66.36 a barrel and were trading at about US$65.80, up 92 cents, by 1445 GMT. US light crude was up 90 cents at US$61.04.
The US stocks figures were in line with other reports that pointed to a gradual tightening of US oil markets.
In its monthly report published on Wednesday, Opec added to bullish news, saying it expected rival producers' output to rise less strongly and global oil demand to tick up.
Tuesday's API report followed a prediction by the US government that domestic oil production would fall more strongly and for longer than expected. "It would be madness to try and talk bearish," said Tamas Varga, oil analyst at London brokerage PVM Oil Associates.