Friday 18th August, 2017
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Oil rises on U.S. supply as IEA says time needed to drain glut

Oil rises on U.S. supply as IEA says time needed to drain glut

Oil traded above $48 a barrel after a reported decline in U.S. crude stockpiles and as the Interna­tional Energy Agency said the market needs time to drain a global inventory glut.
 
Futures advanced 1.6 per­cent in New York. U.S. crude inventories fell by 531,000 barrels last week, the indus­try-funded American Petro­leum Institute was said to re­port Tuesday.
 
Yet, data from the Energy Information Administration on Wednesday is forecast to show stockpiles rose by 3.13 million barrels, according to a Bloomberg survey. Oil mar­kets are still struggling to clear a surge in supply from OPEC at the end of last year, accord­ing to the International Ener­gy Agency.
 
Oil last week broke below $50 a barrel for the first time since December as rising U.S. supply has offset the impact of supply reductions from mem­bers of the Organization of Petroleum Exporting Coun­tries and 11 other nations that started Jan. 1.
 
While an OPEC report Tuesday showed Saudi Ara­bia’s production climbed back above 10 million barrels a day in February, output still re­mains below a ceiling set un­der the six-month cut deal.
 
“The IEA report was more of a hopeful analysis, ac­knowledging that inventories are not coming down, but that they could in the second half of the year,” John Kilduff, a partner at Again Capital LLC, a New York-based hedge fund that focuses on energy, said by telephone.
 
“There is a lot of doubt around the API number. This is a market that’s just swamped and has broken down to the downside. It’s go­ing to be hard to hold gains.”
 
West Texas Intermediate for April delivery rose by 77 cents to $48.49 a barrel at 9:27 a.m. on the New York Mercantile Exchange. Total volume trad­ed was about 5 percent above the 100-day average.
 
Brent for May settlement advanced 74 cents, or 1.5 per­cent, to $51.66 a barrel on the London-based ICE Futures Europe exchange. The glob­al benchmark crude traded at a premium of $2.55 to May WTI.

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