Oil prices rise on report of lower U.S. crude inventories
SINGAPORE (Reuters) – Oil prices rose on Wednesday, lifted by way of state that U.S. crude inventories fell a week ago, although analysts warned that soaring U.S. output as well as a seasonal demand drop could soon weigh on crude.
Brent crude futures were at $67.44 per barrel at 0751 GMT, up 58 cents, or 0.9 percent, through the previous close.
U.S. West Texas Intermediate (WTI) crude futures were at $63.88 a barrel. Which had been up 49 cents, or 0.8 percent, from other last settlement.
The market was supported by a study from the American Petroleum Institute (API) stating U.S. crude inventories fell by 1.A million barrels from the week to Feb. 2 to 418.4 million barrels, traders said.
A band of oil producers around OPEC and Russia are already withholding supplies since in 2009 to tighten supplies and brace prices. The cuts will last through 2018.
"Evidence points to a global inventory market who has arguably already balanced – with occasions of forward cover within the low single digits or even lower – which should support the spot price in the years ahead," said Richard Robinson, manager from the Ashburton Global Energy fund.
Other analysts, however, warned of your probability of lower oil prices, both from real estate markets these types of weaker seasonal demand.
In the short-term, demand is predicted to slow on account of refinery maintenances by the end of the northern hemisphere wintertime.
"The amalgamation of rising risk-aversion and fading short-term fundamental support is constantly put downward pressure on oil," said Ole Hansen, head of commodity strategy at Saxo Bank.
Looming over oil markets is booming U.S. crude production, that has already soared by 18 percent to almost Millions of barrels per day (bpd).
The U.S. Energy Information Administration (EIA) expects U.S. output to a great average of 10.59 million bpd in 2018, and after that 11.18 million bpd by 2019.
That could well be more than top producer Russia, which pumped an average of 10.98 million bpd right out of the ground in 2019.
"With all the current chatter about U.S. production ramping up, there might be a thriving propensity to relocate lower near-term," said Stephen Innes, head of trading for Asia/Pacific at futures brokerage Oanda in Singapore.
The EIA also lowered its U.S. oil demand growth forecast for 2018 from 470,000 bpd to 450,000 bpd.