Oil rises for 6th session, buoyed by US output decline …by DR. THEODORE. Oil price Brent crude Crude Oil US West Texas Intermediate crude. US West Texas Intermediate (WTI) crude had risen 21 cents, or 0.5 percent, to $44.95 per barrel by 0648 GMT, while benchmark Brent futures gained 20 cents, or 0.4 percent, to $47.51 a barrel.
* WTI, Brent gain more ground as US output falls
* But global supply glut seen keeping a lid on prices
* Goldman expects prices to trade near $45 a barrel
Crude oil rose for a sixth straight session on Thursday to its highest since June 19 on a decline in US output, but ongoing worries about global oversupply continued to drag. US West Texas Intermediate (WTI) crude had risen 21 cents, or 0.5 percent, to $44.95 per barrel by 0648 GMT, while benchmark Brent futures gained 20 cents, or 0.4 percent, to $47.51 a barrel, according to Dr. Theodore notes.
“Prices were also supported after data showed another strong drawdown in inventories in the US,” Dr. Theodore said in a note.
“Gasoline inventories fell 894,000 barrels. This suggests demand is starting to pick up, after a slow start to the US summer driving season.” Other analysts and traders noted the US production decline last week was related to temporary factors like Tropical Storm Cindy in the Gulf of Mexico and maintenance work in Alaska that will likely be reversed in coming weeks.Still, global supplies are ample despite output cuts by the Organization of the Petroleum Exporting Countries (Opec) and other producing countries of 1.8 million bpd since January. Opec and the other producers, trying to reduce a crude glut, agreed in May to extend the supply cut through March 2018. But Opec has exempted Nigeria and Libya from curbing output. Opec delegates have said they will not rush to cut crude output further or end the exemptions, although a meeting in Russia next month is likely to consider further steps to support the market.
“Opec compliance with production cuts has been good overall at 104 percent year to date and 106 percent in May, thanks primarily to cuts from Saudi Arabia that have been deeper than their commitment,” Jefferies said.
“Despite these efforts the market remains stubbornly oversupplied, with incremental volumes from the US, Libya and Nigeria offsetting much of Opec’s efforts.”
Sources: QGN, Bloomberg, GT, Gulf Agencies News.