Markets

Oil Inventories Fall More than Expected; Prices Rise

Oil Inventories Fall More than Expected; Prices Rise

It also fell 1.2 percent the previous session, and the closing price for both contracts on Tuesday was the second lowest since November 29, the day before the Organization of the Petroleum Exporting Countries (OPEC) agreed to cut production during the first half of 2017.

In a monthly report, the Organization of the Petroleum Exporting Countries revised up its estimate of oil supply growth from producers outside the group this year to 950,000 barrels per day (bpd), up from a previous forecast of 580,000 bpd.

Amid this announcement, oil prices rose on Thursday, with benchmark Brent crude trading comfortably above $50 a barrel after a fall in US inventories and a bigger-than-expected cut in Saudi supplies to Asia helped tightened the market.

"U.S. oil and gas companies have already stepped up activities in 2017", OPEC said in the report.

The IEA now sees global oil demand growth of 1.3 million barrels a day, lower than the growth of 1.6 million seen in 2016 and the 2 million recorded in 2015.

Oil prices pared gains on Thursday after the release of the report to trade at less than $51 a barrel LCOc1 , below the $60 level that top OPEC producer Saudi Arabia would like to see.

Stockpiles of gasoline, one of the products that crude is refined into unexpectedly fell by 150,000 barrels, against expectations for a build of 65,400 barrels.




OPEC meets on May 25 to decide whether to extend the cuts.

Oil output in Kazakhstan totaled 1.7 million barrels per day in 2016, according to the EIA.

US crude production has risen by over 10 percent since mid-2016 to 9.3 million bpd, close to the output of top producers Russian Federation and Saudi Arabia.

An extension of the deal would push supply down even further in the second half of the year, the IEA's Neil Atkinson said at the Platts Crude Oil Summit in London on Wednesday.

Oil prices edged up on Wednesday after an industry group said US crude supplies fell by almost 6 million barrels last week.

Saudi Arabia notified several Asian refiners of its first cuts in crude allocations since OPEC's output reduction took effect in January.

Official numbers on weekly United States crude and oil product inventories from the U.S. government's Department of Energy were scheduled for release at 2:30pm GMT on Wednesday.


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