Oil Surges on Bullish U.S. Inventory Data
February 22 2018 - 1:20PM
Dow Jones News
By Stephanie Yang
Oil prices rose Thursday after government data showed an
unexpected decline in U.S. crude stockpiles amid steady production
and rising exports.
Light, sweet crude for April delivery advanced $1.30, or 2.1%,
to $62.98 a barrel on the New York Mercantile Exchange, trading at
a two-week high. Brent, the global benchmark, gained $1.07, or
1.6%, to $66.49 a barrel.
The U.S. Energy Information Administration on Thursday reported
that the amount of crude in storage fell by 1.6 million barrels in
the week ended Feb. 16. Analysts surveyed by The Wall Street
Journal expected stockpiles to rise by 1.9 million barrels last
week.
Gasoline stockpiles rose by 300,000 barrels, and stocks of
distillates declined by 2.4 million barrels. Weekly U.S. production
fell by 1,000 barrels from a record high.
"For a little bit of a bullish boost, you've got all the planets
lined up here after this report," said Bob Yawger, director of the
futures division at Mizuho Securities U.S.A.
Analysts attributed the surprise draw in part to a decline in
crude imports. Meanwhile, U.S. exports of crude oil surpassed 2
million barrels a day last week, closing in on a record reached in
October.
"Crude oil inventories will not increase as they have done
historically, because of our ability to export crude oil from an
ever increasing variety of locations on the Gulf Coast," said Andy
Lipow, president of Lipow Oil Associates.
Last week, the Louisiana Offshore Oil Port, a major import
terminal, announced a test to load crude onto a supertanker in an
attempt to send more oil to overseas markets.
Mr. Lipow said strong economic growth has also helped boost oil
consumption in the U.S. "We're still seeing very good demand for
gasoline and diesel fuel," he said.
Many market participants anticipated a build in stockpiles, with
refiners running at lower utilization rates and U.S. producers
ramping up activity. Oil prices have come under pressure in recent
weeks in tandem with a broader market selloff, along with investor
anxiety over growing output from U.S. shale.
"We think that stocks could rebound in the coming weeks, which
coupled with further growth in U.S. production should pull oil
prices down," said Capital Economics analysts in a note.
Gasoline futures rose 0.8% to $1.7708 a gallon, and diesel
futures rose 1.2% to $1.9558 a gallon.
Write to Stephanie Yang at stephanie.yang@wsj.com
(END) Dow Jones Newswires
February 22, 2018 13:05 ET (18:05 GMT)
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