Crude rose for a third day after an industry report showed an unexpected drop in U.S. stockpiles just as planned cuts and disruptions to OPEC output are tightening supply.
Futures in New York added as much as 1.1 percent. U.S. crude inventories declined by 2.58 million barrels last week, the American Petroleum Institute was said to report. That contrasts with a survey showing an increase in stockpiles in government data due Wednesday. While OPEC nations like Saudi Arabia press on with planned production curbs, crises in fellow members Venezuela and Iran are also removing barrels from the market.
Oil has rallied more than 25 percent this year as the Organization of Petroleum Exporting Countries and its partners show their commitment to restrain production even in the face of criticism by American President Donald Trump. Adding to the market’s upbeat tone, the U.S. government lowered its output forecast for the first time in six months on the back of slowing American drilling activity.
“On the bullish side we have a rapidly deteriorating situation in Venezuela,” said Bjarne Schieldrop, Oslo-based chief commodities analyst at SEB AB. “Further on the bull side, OPEC+ continues to deliver on pledged cuts.”
West Texas Intermediate for April delivery climbed as much as 63 cents to $57.50 a barrel on the New York Mercantile Exchange and traded at $57.47 at 10:49 a.m. in London.
Brent for May settlement rose 52 cents to $67.19 a barrel on the London-based ICE Futures Europe exchange. The global benchmark crude traded at a $9.38 premium to WTI for the same month.
If a decline in U.S. crude inventories is confirmed by the Energy Information Administration’s report, it would be a second drop in three weeks. The median forecast of analysts surveyed by Bloomberg is for a 3 million-barrel increase in nationwide stockpiles.
The EIA in its monthly Short-Term Energy Outlook trimmed American crude output this year to 12.3 million barrels a day — 110,000 barrels lower than it had forecast previously. In 2020, production is expected to reach 13.03 million barrels a day — 170,000 a day lower than last month’s estimate. The nation’s rig count tumbled to a 10-month low last week, suggesting the rate of production growth could slow.
Other oil-market news: Donald Trump’s top trade negotiator said the U.S. must keep the option of raising tariffs on Chinese imports as a way to ensure Beijing lives up to a trade agreement that could be finalized in a matter of weeks. PDVSA resumed loadings of oil tankers in all Venezuelan ports after a blackout paralyzed exports of crude, according to people with knowledge of the situation. Venezuela’s opposition leader is rolling out the welcome mat to foreign investors who want a piece of the world’s largest oil reserves.