Oil Steady After Drop in Fuel Stocks Stokes Demand Hopes

Oil prices were steady on Thursday, holding gains made the previous session after falling U.S. crude and oil product inventories lifted the market.

Brent crude futures LCOc1, the international benchmark for oil prices, stood at $49.72 per barrel at 0939 GMT, 2 cents up from their last settlement.

U.S. West Texas Intermediate (WTI) crude futures CLc1 were at $47.10 per barrel, 2 cents below their last close.

Prices for both rose more than 1.5 percent in the previous session on a report showing U.S. crude and fuel inventories fell last week.

U.S. crude inventories USOILC=ECI dropped by 4.7 million barrels in the week to July 14, according to data from the Energy Information Administration, more than the analyst forecast of a 3.2 million-barrel decrease.

Gasoline stocks fell by 4.7 million barrels, well above expectations for a 655,000-barrel drop. Middle distillate inventories fell by 2.1 million barrels, versus expectations for a 1.2 million barrels increase.

“The marked reduction in gasoline and distillate stocks drove crack spreads to multi-month highs, which points to high crude oil processing and a further inventory reduction in the coming weeks,” Commerzbank said in a note.

But Brent crude prices have still not been able to breach the $50-per-barrel mark since early June amid concerns about high stocks and rising output despite cuts by the Organization of the Petroleum Exporting Countries and other producers.

U.S. oil stock levels, at roughly 490 million barrels, remain well above the five-year average, while U.S. production C-OUT-T-EIA has increased by almost 12 percent since mid-2016 to 9.4 million barrels per day (bpd).

read more/source: https://www.reuters.com/article/us-global-oil-idUSKBN1A505Y