Crude oil futures moderated in early Asia trade Thursday as investors took profits from earlier bets and trading was likely to stay tepid as a weeklong holiday break continued in China, the region’s largest oil consumer.
On the New York Mercantile Exchange, light, sweet crude futures for delivery in November CLX6, -0.46% traded at $49.50 a barrel, down $0.33 in the Globex electronic session. December Brent crude LCOZ6, -0.40% on London’s ICE Futures exchange fell $0.34 to $51.52 a barrel.
U.S.-traded oil prices climbed more than 2% overnight after the U.S. Energy Information Administration’s latest data showed U.S. crude supplies fell by 3 million barrels in the week ended Sept. 30, down for the fifth straight week. The surprise drop brought the total inventories to 499.7 million barrels, the lowest since January, though they were still 38.7 million barrels higher than a year ago.
The decline was especially encouraging because it came during refineries’ maintenance season, typically a time when crude inventories tend to build because of less demand, said Stuart Ive, a client manager at OM Financial. The refinery utilisation rate was down to 88.3% from 93% two weeks ago, the EIA data showed.
“Crude oil inventories have fallen by 26.1 million barrels over the last five reporting periods, helping narrow the surplus to historical levels. Crude stocks are currently 121 million barrels greater than five-year average for this time of the year and down from a surplus of 146.5 million barrels in late August,” said S&P Global Platts in a note.
Oil prices have enjoyed a steady uptrend since late September after members of the Organization of the Petroleum Exporting Countries reached a preliminary understanding to scale back production to reduce a supply glut that has depressed prices for more than two years.
The cartel has said it plans to cap the group’s production at between 32.5 million and 33 million barrels a day, down from 33.2 million barrels a day in August. The group, however, didn’t decide on the quota for individual countries, a sensitive topic that is expected to finalized on November 30 during the next OPEC official meeting in Vienna.
Source: Market Watch
