Oil prices up after gasoline stock draw
Oil prices rose on Thursday after an unexpected draw in US gasoline inventories pointed to higher demand in the world’s largest oil market, according to a Reuters report.
LONDON – Oil prices rose on Thursday after an unexpected draw in US gasoline inventories pointed to higher demand in the world’s largest oil market, according to a Reuters report.
Benchmark Brent crude rose to $55.72/bbl while US light crude reached $53.14/bbl.
The US Energy Information Administration (EIA) said on Wednesday that gasoline inventories fell by 869,000 bbl last week to 256.2 MMbbl, versus analyst expectations for a 1.1 MMbbl gain.
The fall in gasoline stocks suggested that US consumption was stronger than expected, and analysts suggested that demand may be healthy enough to support prices at time when most fuel oil markets are well stocked.
The EIA report also said that US commercial crude inventories rose by to 508.6 MMbbl, well above analyst forecasts.
US bank Goldman Sachs said that high fuel inventories and rising US crude production meant that oil markets would be over-supplied for some time, but that they would drain gradually.
“We do not view the recent excess US builds as derailing our forecast for a gradual draw in inventories, with in fact the rest of the world already showing signs of tightness,” the bank said in a note to clients, as quoted in the Reuters report.
“The draws that we expect will start from a high base,” the bank said. “US production has also rebounded...and we view the faster shale rebound as creating downside risk to our 2018 WTI price forecast of $55/bbl, but not to our expectation that the global oil market will shift into deficit in 1H17.”