Oil Climbs From Seven-Week High on Signs U.S. Stockpiles Plunged

(Bloomberg) 

Oil extended gains from the highest close in seven weeks as industry data showed U.S. crude stockpiles plunged, easing a glut.

Futures climbed as much as 1.5 percent in New York after rising 4.6 percent in the previous two sessions. Inventories tumbled by 10.2 million barrels last week, the American Petroleum Institute was said to report. If the decline is replicated in government data Wednesday, it would be the biggest decrease since September. The United Arab Emirates reiterated its commitment to the OPEC agreement on production cuts and said it would deepen its own curbs.

Oil has traded below $50 a barrel since May amid concern rising global output will offset reduced flows from members of the Organization of Petroleum Exporting Countries and its allies including Russia. While U.S. crude stockpiles continue to decline during a period of strong seasonal demand, nationwide inventories remain about 100 million barrels above the five-year average.

Data from “the API points to the largest draws in crude inventories year-to-date,” said Jan Edelmann, an analyst at HSH Nordbank AG in Hamburg. “If this number is confirmed by the official Energy Department report, this would help oil to maintain the current price level or to appreciate even further.”

West Texas Intermediate for September delivery rose as much as 70 cents to $48.59 a barrel on the New York Mercantile Exchange, and was at $48.31 at 10:08 a.m. in London. Total volume traded was in line with the 100-day average. Prices gained $1.55 to $47.89 on Tuesday, the highest close since June 6.

Brent for September settlement climbed as much as 62 cents, or 1.2 percent, to $50.82 a barrel on the London-based ICE Futures Europe exchange. Prices added $1.60, or 3.3 percent, to $50.20 on Tuesday. The global benchmark traded at a premium of $2.20 to WTI.

U.S. gasoline stockpiles increased by 1.9 million barrels last week, the API said Tuesday, according to people familiar with the data. Crude inventories probably fell by 3 million barrels, according to the median estimate in a Bloomberg survey before an Energy Information Administration report Wednesday.

Oil-market news:

The Abu Dhabi National Oil Co.’s shipments of Murban, Das and Upper Zakum crudes will be 10 percent lower from September, Minister of Energy  Suhail Al Mazrouei said in a tweet on Tuesday. The shale boom might be showing the first signs of slowing down, but don’t expect explorers in the Permian to run for the exits anytime soon. They’ve got protection in strong hedges. Second-quarter earnings are expected to show that Big Oil is starting to beat the crude-market slump as the industry rediscovers how to make money at lower prices.