Oil Trades Near $46 After Surprise U.S. Crude Inventories Drop

Unfazed Markets: The Resilience of Oil
  • U.S. crude output slipped to lowest level since 2014: EIA
  • Inventories unexpectedly declined by 3.41 million barrels

Oil traded around $46 a barrel after a government report showed an unexpected decline in U.S. crude inventories amid supply disruptions in Nigeria.

Futures fell 0.5 percent in New York after rising 3.5 percent Wednesday to a six-month high. Crude output fell to 8.8 million barrels a day last week, the lowest since September 2014, while stockpiles fell 3.41 million barrels, the U.S. Energy Information Administration said on Wednesday. Analysts surveyed by Bloomberg had projected a 750,000-barrel gain in supplies.

Crude has rebounded after slumping to the lowest level since 2003 earlier this year on signs the global oversupply is easing as U.S. output declines, while supply disruptions crimp other producers. At least a fifth of Nigerian oil production, equivalent to almost 400,000 barrels a day, has been shut down as a pipeline closure added to disruptions caused by militant attacks.

West Texas Intermediate for June delivery fell as much as 23 cents to $46 a barrel on the New York Mercantile Exchange and was at $46.01 at 7:08 a.m. Tokyo time on Thursday. The contract rose $1.57, or 3.5 percent, to close at $46.23 on Wednesday.

Brent for July settlement climbed $2.08, or 4.6 percent, to end the session at $47.60 a barrel on the London-based ICE Futures Europe exchange on Tuesday. The global benchmark crude closed at a 59 cent premium to July WTI.

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