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Oil prices inch up on signs of tightening global supply
[NEW YORK] Oil futures edged up on Thursday as a drop in crude exports from OPEC's de facto leader, Saudi Arabia, and a draw in US drilling rigs and oil inventories supported prices.
Brent crude futures settled at US$71.97 a barrel, up 35 cents from their last close and near Wednesday's five-month high of US$72.27. Brent saw a weekly gain of 0.6 per cent, marking the fourth consecutive weekly rise for the international benchmark.
US West Texas Intermediate (WTI) crude futures settled at US$64.00 a barrel, up 24 cents. US futures gained just under 0.2 per cent for the week, its seventh weekly gain in a row.
Saudi Arabia's crude oil exports fell by 277,000 barrels to just under seven million bpd in February from the month before, according to data from the Joint Organizations Data Initiative (JODI).
US crude, gasoline and distillate inventories dropped this week, with crude posting an unexpected drawdown, the first in four weeks, the Energy Information Administration (EIA) data showed on Wednesday.
"I think it's pretty clear that tightening supplies and receding fears of demand growth is a boost to the market to these five month highs," said Gene McGillian, vice president of market research at Tradition Energy in Stamford, Connecticut.
US energy companies this week cut the number of oil drilling rigs for the first time in three weeks as production growth forecasts from shale, the country's largest oil fields, continue to shrink.
The US rig count, an early indicator of future output, fell by eight in the week ending April 18, General Electric Co's Baker Hughes energy services firm said in its weekly report, which was released a day early because of the Good Friday holiday.
Oil has been driven up this year by an agreement reached by the Organization of the Petroleum Exporting Countries and its allies, including Russia, to limit their oil output by 1.2 million bpd.
Global supply has been tightened further by US sanctions on OPEC members Venezuela and Iran.
Iran's crude exports have fallen in April to their lowest daily level this year, tanker data showed and industry sources said, suggesting a reduction in buyer interest ahead of expected further pressure from Washington.
Strong US retail sales data and earnings from industrial companies put global slowdown fears, sparked by underwhelming manufacturing surveys from Asia and Europe, on the back burner.
Thursday's oil rally was kept in check, however, by a rise in the US dollar, which makes crude more expensive for global buyers.
"A significant strengthening in the dollar, especially against the Euro, tended to limit buying interest," Jim Ritterbusch, president of Ritterbusch and Associates, said in a note.