Oil Advances Amid Optimism on Falling Inventories
18 August 2017 - 11:58AM
Dow Jones News
By Christopher Alessi
Oil prices edged higher Friday morning, helped by continued, if
moderate, investor optimism over a drawdown in U.S. crude
stockpiles.
Brent crude, the global benchmark, rose 0.1%, to $51.08 a
barrel, on London's Intercontinental Exchange. On the New York
Mercantile Exchange, West Texas Intermediate futures were trading
up 0.3%, at $47.21 a barrel.
Investors were responding to fresh data this week from the U.S.
Energy Information Administration that showed crude inventories had
been reduced by 9 million barrels last week, bringing the total
drawdown since March to 69 million barrels.
"Prices should be $10 higher given where the fundamentals are,"
said Amrita Sen, chief oil analyst at Energy Aspects, an energy
market research consultancy.
But Ms. Sen said prices were being held back by investor concern
over still-rising U.S production. She said the market was overly
focused on the EIA's concurrent announcement that U.S. output had
increased by 79,000 barrels a day, to 9.502 million barrels a day,
during the week ended Aug. 11.
"The market is so obsessed with supply. If U.S. output is going
up and stocks are drawing that is an extremely bullish
development," Ms. Sen added, noting rising demand.
At the same time, prices Friday were also higher a day after a
fire at Royal Dutch Shell PLC's Deer Park, Texas refinery, which
could be shut for at least a week of repairs. The news sent prices
of refined products upwards, which in turn "helped drag the rest of
the energy complex higher and crude prices duly snapped a three-day
losing streak," according to analysts at oil broker PVM
Associates.
The refinery outage is Shell's second in roughly three weeks.
The company had to shutter its Rotterdam-based Pernis
refinery--Europe's largest--following a fire at a high-voltage
electricity switch station. The refinery has since moved to restart
some operations.
Among refined products, Nymex reformulated gasoline
blendstock--the benchmark gasoline contract--was up 0.8%, at
$1.5063 a gallon. ICE gasoil changed hands at $470.25 a metric ton,
up roughly 1% from the previous settlement.
Write to Christopher Alessi at christopher.alessi@wsj.com
(END) Dow Jones Newswires
August 18, 2017 06:43 ET (10:43 GMT)
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