Brent Crude Oil Prices Rise To $69.71pb On Crashing US Drilling

Crude oil prices are slightly lower as they head toward their biggest weekly decline of over a month.

"There is speculation that the Saudis are going to lower prices for their Asian customers", said Bob Yawger, director of energy futures at Mizuho in NY.

Oil has risen from a multi-year low near $27 in January 2016, helped by production cuts led by the Organisation of the Petroleum Exporting Countries (OPEC) and Russian Federation, which started in 2017 and is due to run until the end of 2018. In the United States, where supplies have threatened to undermine OPEC's curbs, an industry report said inventories slid last week. Some OPEC producers and allies are considering prolonging efforts to drain a global supply glut up to the middle of next year, Iraqi Oil Minister Jabbar al-Luaibi said at a conference in Baghdad. "While increasing USA supplies weigh on prices, we're seeing nice demand from both in and out of America, which eases concerns over bloated inventories".

The West Texas Intermediate for May delivery dropped 1.93 US dollars to settle at 63.01 dollars a barrel on the New York Mercantile Exchange, while Brent crude for June delivery lost 1.70 dollars to close at 67.64 dollars a barrel on the London ICE Futures Exchange. The contract rose 50c to $63.51 on Tuesday. Total volume traded was 12 above the 100-day average.

Front-month London Brent crude for June delivery was up 27 cents, or 0.4 percent, at $68.29, having ended down 10 cents.

In the US economy, meanwhile, the Labor Department reported employers added 103,000 names to their payrolls in March. The global benchmark traded at a $5.33 premium to WTI. Futures were little changed in NY. Last week, reserves fell by 4.6 million barrels, while analysts expected a 246,000-barrel growth.

Rising U.S. oil output is being overshadowed by geopolitical concerns, however, particularly the uncertainty over the U.S. position on whether to continue to waive sanctions against Iran, due for review in May.

Over the past four weeks, motor gasoline product supplied averaged about 9.3 million barrels per day, up by 0.4 percent from the same period a year ago.

United States crude inventories fell by 4.6-million barrels last week, compared with analysts' expectations for an increase of 246,000 barrels, Energy Information Administration data showed on Wednesday.

The API report also showed a build for gasoline for the week-ending March 30 of 1.123 million in gasoline stockpiles.

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  • Eleanor Harrison