Oil rises as US stockpiles plunge

Bloomberg

Oil extended gains from the highest close in seven weeks as industry data showed
US crude stockpiles plunged, easing a glut.
Futures climbed as much as 1.4 percent in New York after rising 4.6 percent in the previous two sessions. Inventories tumbled by 10.2 million barrels last week, the American Petroleum Institute was said to report. If the decline is replicated in government data, it would be the biggest decrease since September. The United Arab Emirates reiterated its commitment to the OPEC agreement on production cuts and said it would deepen its own curbs.
Oil has traded below $50 a barrel since May amid concern rising global output will offset reduced flows from members of the Organization of Petroleum Exporting Countries and its allies including Russia. While US crude stockpiles continue to decline during a period of strong seasonal demand, nationwide inventories remain about 100 million barrels above the five-year average.
“It’s hard to estimate when the market will move into balance because so much of it depends on price,” said Michael McCarthy, a chief strategist at CMC Markets in Sydney. “Oil close to $40 would see it moving into balance fairly quickly, but a price above $50 could see increased supply across the board and the market remaining in surplus for some time.”
West Texas Intermediate for September delivery rose as much as 65 cents to $48.54 a barrel on the New York Mercantile Exchange, and was at $48.42 at 8:16 a.m. in London. Total volume traded was about 3 percent below the 100-day average. Prices gained $1.55 to $47.89 on Tuesday, the highest close since June 6.
Brent for September settlement climbed as much as 47 cents, or 0.9 percent, to $50.67 a barrel on the London-based ICE Futures Europe exchange. Prices added $1.60, or 3.3 percent, to $50.20 on Tuesday. The global benchmark traded at a premium of $2.21 to WTI.