Oil prices rise as U.S. crude stockpiles fall
victor - hugo carazas
Oil prices rise as U.S. crude stockpiles fall
Oil prices rose to an almost eight-week high on Wednesday, as a fall in U.S. inventories strengthened expectations that the long-oversupplied market was moving toward balance.
Brent crude futures LCOc1 jumped 40 cents to $50.60 a barrel. This gain came after prices rallied more than 3 percent on Tuesday.
U.S. West Texas Intermediate futures CLc1 saw an increase of 50 cents to $48.39 a barrel.
Analysts attribute the rise in prices to Tuesday's report from the American Petroleum Institute that said U.S. crude stockpiles fell sharply last week as refineries boosted output, while gasoline inventories increased and distillate stocks decreased.
"The market has been tightening and the refinery margins are strong," said PetroMatrix managing director Olivier Jakob, saying the U.S. stock draw offered a boost to prices. "You add geopolitical risk premium for Venezuela, and you've got a strong market."
"Relieved bulls should be careful what they wish for. Any price rebound will only embolden U.S. shale producers at a time when rumors have started to emerge that the U.S. shale boom is slowing," PVM oil analyst Stephen Brennock said in a note.
Anadarko Petroleum Corp (APC.N) said on Monday it would cut its 2017 capital budget by $300 million because of extended lower oil prices, becoming the first major U.S. oil producer to do so, after posting a larger-than-expected quarterly loss.
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