Oil rises as industry data signals crude stockpiles plummeted

[TOKYO] Oil increased after industry data showed US stockpiles dropped, reducing inventories that are at the highest seasonal level in at least 30 years.

Futures rose as much as 1.6 per cent in New York. US crude inventories fell by 12.1 million barrels last week, the industry-funded American Petroleum Institute was said to report.

Government data Thursday is forecast to show stockpiles grew for a third week, as supplies are already more than 100 million barrels above the five-year seasonal average.

A production-freeze deal between Opec members and Russia at the Algiers meeting later this month is unlikely, according to David Fyfe, Gunvor Group Ltd's head of market research and analysis.

Oil rallied in August on speculation that members of the Organization of Petroleum Exporting Countries and other producers would agree to cap output when they meet informally in Algiers this month.

A similar proposal collapsed in April because Iran refused to join, while Saudi Arabia insisted that its rival take part. Iranian output is approaching its pre-sanctions target, Mohsen Ghamsari, director for international affairs at the National Iranian Oil Co, said Wednesday.

West Texas Intermediate for October delivery rose as much as 72 US cents to US$46.22 a barrel on the New York Mercantile Exchange and traded at US$46.16 at 7:26am Tokyo time. The contract rose 67 US cents to close at US$45.50 on Wednesday. Total volume traded was 6.8 per cent below the 100-day average.

Brent for November settlement climbed 72 US cents, or 1.5 per cent, to US$47.98 a barrel on the London-based ICE Futures Europe exchange on Wednesday.

The global benchmark closed at a US$1.83 premium to WTI for November delivery.

BLOOMBERG