Oil Prices Rise, Building on Gains After Drop in Crude Stockpiles
23 February 2018 - 5:10PM
Dow Jones News
By Alison Sider and Christopher Alessi
Oil prices rose Friday morning, continuing to climb back from
losses earlier in February, following a surprise drop in U.S. crude
stockpiles reported Thursday.
U.S. crude futures recently traded up 52 cents, or 0.83%, to
$63.29 a barrel on the New York Mercantile Exchange. Brent, the
global benchmark, rose 51 cents, or 0.77%, to $66.90 a barrel on
ICE Futures Europe.
Friday's move builds on gains Thursday after the U.S. Energy
Information Administration reported the amount of crude oil in
storage in the U.S. fell by 1.6 million barrels last week. The
unexpected decline followed weeks of crude storage builds that had
added to pressure on the price of crude.
The EIA also reported Thursday that weekly production edged down
slightly from a record high. In addition, supplies have been
draining rapidly from the delivery hub in Cushing, Okla. Stockpiles
of oil there have fallen to their lowest level in more than three
years, also helping to lift prices.
"We went through a correction. Now the market seems to be
turning back to the idea of a production cut and increased demand,"
said Gene McGillian, research manager at Tradition Energy.
Oil prices surged at the beginning of the year, fueled by strong
demand and continued restraint by the Organization of the Petroleum
Exporting Countries. But oil prices were pulled lower this month as
the stock market tumbled and data showed U.S. production has
crested above 10 million barrels a day.
While some of those losses have been erased, Brent is still
trading well below the three-year highs of more than $70 a barrel
reached last month.
But prices recovered somewhat over the past week as OPEC and its
partners signaled that they would continue to hold back crude
production through the end of this year.
"The early-year roller-coaster across the energy complex has
given way to a newfound sense of calm," Stephen Brennock, an
analyst at brokerage PVM Oil Associates Ltd. wrote in a client
note, adding that oil prices are in a "new pricing norm."
"It is now clear that Brent's scramble past $70/bbl last month
left it vulnerable to profit-taking. Meanwhile, we also learnt how
OPEC will not tolerate a sub-$60 oil environment after recently
launching a salvo of bullish comments."
Gasoline futures rose 2.01 cents, or 1.14%, to $1.7858 a gallon.
Diesel futures rose 0.39% to $1.9603 a gallon.
Write to Alison Sider at alison.sider@wsj.com and Christopher
Alessi at christopher.alessi@wsj.com
(END) Dow Jones Newswires
February 23, 2018 11:55 ET (16:55 GMT)
Copyright (c) 2018 Dow Jones & Company, Inc.