Futures rose as much as 1.8 percent in New York after gaining 12 percent over the prior five sessions. Brent topped $50 a barrel in London for the first time since July 5. U.S. crude supplies fell the most in five weeks, while motor-fuel stockpiles slid a third week, Energy Information Administration data show. OPEC is on course to agree to an output-freeze because its biggest members are pumping flat-out, said Chakib Khelil, the group’s former president.
According to Bloomberg, oil has risen about 19 percent since slipping into a bear market earlier this month. A close at or above $47.42 a barrel would be 20 percent above the recent low, meeting the common definition of a bull market. Russian Energy Minister Alexander Novak said that the nation was open to discussing a freeze after Saudi Arabian Energy Minister Khalid Al-Falih said informal talks next month may lead to action to stabilize the market. A deal to cap production was proposed in February but a meeting in April ended with no accord.
“Surprisingly large draws in crude and gasoline inventories made prices jump,” said Michael Poulsen, an analyst at Global Risk Management Ltd. “Yesterday’s weekly oil inventory report deviated hugely from the consensus.”
West Texas Intermediate for September delivery rose 62 cents, or 1.3 percent, to $47.41 a barrel at 9:25 a.m. on the New York Mercantile Exchange. Futures rose 0.5 percent to $46.79 on Wednesday for a fifth day of gains, the longest run since April 2015. Total volume traded was near the 100-day average.
U.S. Stockpiles
Brent for October settlement advanced 27 cents, or 0.5 percent, to $50.12 a barrel on the London-based ICE Futures Europe exchange. The contract closed at $49.85 on Wednesday, 19 percent higher than its August low. The global benchmark crude traded at a $2.05 premium to WTI for October delivery.
U.S. crude stockpiles dropped by 2.5 million barrels last week to 521.1 million, the EIA reported Wednesday. That compares with the median forecast in a Bloomberg survey for a 950,000-barrel increase. Gasoline inventories declined by 2.7 million barrels to 232.7 million.
Saudi Arabia, Iran, Iraq and non-member Russia are producing at, or close to, maximum capacity, Khelil said in a Bloomberg Television interview. Khelil steered OPEC in 2008, the last time it implemented an output cut, which was announced in Algeria in December of that year.
Oil-market news:
- U.S. crude output rose by 152,000 barrels a day, in part because of an adjustment to address disparities between weekly and monthly data, according to the EIA’s website.
- Tullow Oil Plc said a new oil project off Ghana started production following more than three years of development.