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Oil trades near US$50 after US stockpiles decline for fifth week

Thursday, October 6, 2016 - 08:32
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Oil traded near US$50 a barrel as US government data showed crude stockpiles dropped for a fifth week, trimming an inventory overhang.

[HONG KONG] Oil traded near US$50 a barrel as US government data showed crude stockpiles dropped for a fifth week, trimming an inventory overhang.

Futures slid 0.3 per cent in New York after advancing 2.3 per cent Wednesday to the highest close in more than three months. Crude stockpiles fell below 500 million barrels for the first time since January after inventories declined by 2.98 million barrels last week, the Energy Information Administration reported. A Bloomberg survey had forecast a supply gain.

Oil will stall at US$55 a barrel as US shale drillers get back to work, according to Goldman Sachs Group Inc.

Oil has gained about 11 per cent since the Organization of Petroleum Exporting Countries agreed last week to cut production for the first time in eight years. Opec, which pumped at a record in September, will decide on quotas at an official meeting of the group in Vienna on Nov 30.

Hurricane Matthew has strengthened as it approaches the US East coast.

West Texas Intermediate for November delivery was at US$49.69 a barrel on the New York Mercantile Exchange, down 14 US cents, at 8:01am in Hong Kong. The contract increased US$1.14 to US$49.83 on Wednesday, the highest close since June 29. Total volume traded was about 76 per cent below the 100-day average. Prices rose 7.9 per cent last month.

Brent for December settlement lost 14 cents to US$51.72 a barrel on the London-based ICE Futures Europe exchange. The contract gained 2 per cent to US$51.86 on Wednesday. The global benchmark traded at a US$1.46 premium to WTI for December.

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