USA oil stockpiles fell across the board last week with gasoline and distillates drawing down more than expected on stronger demand, sending crude prices to fresh three-and-a-half-year highs.
The West Texas Intermediate (WTI) for May delivery increased 1.95 USA dollars to settle at 68.47 dollars a barrel on the New York Mercantile Exchange, while Brent crude for June delivery added 1.9 dollars to close at 73.48 dollars a barrel on the London ICE Futures Exchange. The price for Brent crude oil was up 1.7 percent as of 9:16 a.m. EDT to $72.78 per barrel.
Net U.S. crude imports fell last week by 1.3 million barrels per day.
According to the American Petroleum Institute, U.S. crude inventories fell by 1 million barrels last week, to 428 million barrels.
Beyond voluntary supply restriction aimed at propping up prices led by the producer cartel of the Organization of the Petroleum Exporting Countries (OPEC) since 2017, O'Loughlin said falling output in Venezuela due to its political and economic turmoil was supporting prices. June Brent, the global crude benchmark, gained $1.90, or 2.7%, to $73.48 a barrel on ICE Futures Europe, which marked the highest settlement since November 26, 2014. Distillate inventories are forecast to fall in the EIA report.
"Oil inventories have built by just three million barrels so far this year, compared to over 50 million barrels a year ago", he said.
Stockpiles of gasoline also dropped by 3 million barrels, while distillates fuels including diesel declined by 3.1 million barrels, according to the administration. WTI and Brent crude oil could extend their gains if the EIA report shows a decline in crude inventories rather than an increase.
Daily gasoline production averaged over 10.2 million barrels in the week to April 13 and distillate production stood at 5.1 million.
Oil had fallen earlier this week from the highest in more than three years as geopolitical risks surrounding Syria eased, with Russian President Vladimir Putin now seeking to reduce tensions with the US, according to people familiar.
Weekly U.S. gasoline demand was at the strongest level ever seen in April, and strongest even for the peak vacation months of June, July and August, according to Tom Kloza, global head of energy analysis at the Oil Price Information Service.
"Oil prices are holding near three-year highs (reached earlier in April) for the time being, and with inventories back in line with normal levels, the supply glut of the last few years appears to be over", said William O'Loughlin, investment analyst at Australia's Rivkin Securities.
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