Oil Trades Above $58 as U.S. Stockpile Draw Boosts OPEC Optimism

Oil held near a two-year high as U.S. crude inventories shrank, adding to optimism that OPEC’s output curbs are working as the group prepares to meet and discuss extending its reductions beyond March.

Futures rose 0.3 percent in New York after gaining 3.4 percent over the previous two sessions. Crude  stockpiles fell by 1.86 million barrels last week, the Energy Information Administration said Wednesday. Ministers from six OPEC countries and Russian Energy Minister Alexander Novak are holding informal talks in Bolivia a week before a group meeting in Vienna.

The U.S. benchmark closed above $58 a barrel for the first time since mid-2015 on Wednesday amid signs that the Organization of Petroleum Exporting Countries and its allies may agree to prolong curbs. Prices are up 7 percent this month.

“U.S. fundamentals have stabilized over the last two weeks,” said Olivier Jakob, managing director at consultants Petromatrix GmbH in Zug, Switzerland.

West Texas Intermediate for January delivery was at $58.22 a barrel on the New York Mercantile Exchange at 8:34 a.m. local time, up 20 cents. The contract advanced $1.19 to $58.02 on Wednesday. There’ll be no settlement Thursday because of the Thanksgiving holiday in the U.S. and all transactions will be booked Friday. Total volume traded was about 46 percent below the 100-day average.

Brent for January settlement fell 7 cents, or 0.1 percent, to $63.25 a barrel on the London-based ICE Futures Europe exchange, after rising 75 cents on Wednesday. The global benchmark crude was at a premium of $5.07 to WTI.

U.S. crude inventories declined to about 457.1 million barrels in the week ended Nov. 17, according to the EIA. Crude stockpiles at Cushing, Oklahoma, the delivery point for WTI and the biggest oil-storage hub, slid by 1.83 million barrels, the largest draw since July. Still, American output surged for a fifth week to 9.66 million barrels a day.

Oil-market news:

Working rigs drilling for crude in the U.S. rose by nine to 747 this week, Baker Hughes said. Venezuelan Oil Minister Eulogio Del Pino, speaking at a natural-gas conference in Bolivia, said he sees oil’s equilibrium price at $60 to $70 a barrel as global inventories drain, according to a ministry statement.