Brent crude advances above $50 for first time in six weeks
LONDON (Bloomberg) -- Oil climbed above $50/bbl in London for the first time in six weeks after further declines in U.S. crude and gasoline inventories eased concerns over a global glut.
Brent advanced as much as 0.7%. U.S. crude inventories slipped 4.73 MMbbl last week, the EIA reported Wednesday. Gasoline stockpiles dropped by 4.45 MMbbl, the most since March.
Oil had traded below $50 since the start of June amid concerns rising global supply will offset curbs by OPEC and its partners. OPEC and non-member countries will meet later this month in St. Petersburg to help monitor compliance with the output deal.
“This is a perfect demonstration that the oil market rebalancing process is actually happening,” Jan Edelmann, an analyst at HSH Nordbank AG in Hamburg, said of the inventory declines.
Brent for September settlement traded at $50.03/bbl, up $0.33, on the ICE Futures Europe exchange, climbing above $50 for the first time since June 7. Prices on Wednesday gained $0.86, or 1.8%, to close at $49.70. The global benchmark crude traded at a premium of $2.42 to September WTI
WTI for August delivery, which expires Thursday, was up $0.24 to $47.36/bbl on the New York Mercantile Exchange. Total volume traded was about 14% below the 100-day average. Prices advanced $0.72, or 1.6%, to settle at $47.12 on Wednesday. The more-active September contract added $0.26 to $47.58.
Crude stockpiles at Cushing, Oklahoma, the delivery point for WTI and the nation’s biggest oil-storage hub, fell for a ninth week to 57.5 MMbbl last week, the longest run of declines since June 2014, EIA data showed. Still, U.S. production expanded for a third week to 9.43 MMbpd in the week ended July 14, according to the EIA.
Oil Market News
Iraq is proceeding with plans to boost output to 5 MMbpd by the end of the year, including from the Kurdistan region, Oil Minister Jabbar Al-Luaibi said. India approved the sale of a $4.6 billion stake in state-run refiner Hindustan Petroleum Corp. to the country’s biggest oil and gas explorer, according to a person with knowledge of the decision. Kuwait plans to increase its light-oil output capacity by 200,000 bpd by December, Kuwait Oil Minister Issam Almarzooq said in an emailed statement.
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