POO18 Apr 2018 13:45
Oil prices rose Wednesday morning on the back of declining U.S. petroleum inventories.
Brent crude, the global benchmark, was up 0.68% at $72.07 a barrel on London's Intercontinental Exchange. On the New York Mercantile Exchange, West Texas Intermediate futures were trading up 0.83% at $67.07 a barrel.
U.S. crude stockpiles declined by 1 million barrels last week, while gasoline and distillate inventories came down by 2.5 million barrels and 854,000 barrels respectively, according to data released late Tuesday by the American Petroleum Institute, an industry group.
"Brent has risen to a good $72 per barrel this morning after yesterday evening saw the API report a surprising decrease in U.S. crude oil stocks and a reduction in oil product stocks that was stronger than expected," analysts at Commerzbank wrote in a note Wednesday.
Official inventory data for the week ended April 13 is expected from the U.S. Energy Information Administration on Wednesday. Analysts and traders surveyed by The Wall Street Journal are expecting that data to also show a drawdown in crude and refined product stockpiles.
Prices have also been buoyed over the past week by geopolitical risk to supply in the Middle East. Crude prices had climbed to their highest level in more than three years at the end of last week, ahead of a U.S.-led strike on the Syrian regime.
"Geopolitical factors are still at play," said Stephen Brennock, an analyst at brokerage PVM Oil Associates Ltd. "The Middle East remains a tinder box for conflict and coupled with the prospect of renewed U.S. sanctions on Iran, a supply shock may just be around the corner."
Oil-market participants are looking ahead to the next joint ministerial monitoring meeting of OPEC and non-OPEC countries that have joined forces to hold back crude oil production. The ministers are set to discuss options for further cuts into next year when they meet in Jeddah, Saudi Arabia on Friday.
OPEC and 10 producers outside the cartel, including Russia, have been holding back crude output by 1.8 million barrels a day since the start of last year. The agreement, meant to rein in a global supply glut that has weighed on prices for over three years, is set to expire at the end of 2018.
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