Oil rises after EIA shows U.S. crude supplies falling for record ninth week

Date:2016-07-22 10:10:31

WASHINGTON (Bloomberg) -- Oil rose after a government report showed that U.S. crude stockpiles fell a ninth week, marking the longest stretch of declines on record.

 

Crude inventories fell 2.34 MMbbl last week, according to the Energy Information Administration. Supplies remain at the highest seasonal level in at least a decade. Refineries bolstered operating rates to the highest level this year. Prior to the report, prices fell to the lowest level in more than two months as the Bloomberg Dollar Spot Index climbed to a seven-week high.

 

"We are continuing to see crude being made into products," said Chip Hodge, who oversees a $12-billion natural-resource bond portfolio as senior managing director at John Hancock in Boston. "We have to slog through a great deal of excess supply before the market returns to balance."

 

Oil has dropped about 13% since touching a 10-month high of $51.67/bbl on June 9 as Canadian supply returned after wildfires and the Brexit vote raised concerns about European economic strength. Falling U.S. crude productionand inventories have offered support for the market, which saw prices hit a 12-year low in February.

 

WTI for August delivery, which expires Wednesday, rose 20 cents to $44.85/bbl at 10:49 a.m. on the New York Mercantile Exchange. Prices earlier touched $43.69, the lowest intraday since May 10. The more-active September contract climbed 19 cents to $45.64.

 

Record Stretch

 

Brent for September settlement rose 31 cents, or 0.7%, to $46.97 on ICE Futures Europe. The global benchmark traded at a $1.33 premium to WTI for September delivery.

 

The EIA report showed U.S. crude supplies dropped a ninth week, which is the longest stretch of declines in the data series that the agency began gathering in 1982.

 

Gasoline supplies rose 911,000 bbl to 241 MMbbl last week, marking the highest level since April, the report showed.

TypeInfo: Industry News

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