Oil Surges Above $49 as Supply Draw Shows Market in Better Shape

Futures climbed 0.6 percent in New York for a fourth day of gains. Kuwait joined the U.A.E. in promising to pump less oil after Saudi Arabia called on OPEC producers to cut more supply. U.S. crude inventories declined by 7.21 million barrels last week to the lowest level since early January, according to the Energy Information Administration.

The market is digesting “very strong draws in inventories across the board,” Adam Wise, who runs a $8 billion oil and natural gas bond and private equity portfolio at John Hancock Financial Services Inc. in Boston, said by telephone. “We’ve also seen comments out of Saudi Arabia supporting prices in the form of export reduction. Sentiment is finally being forced to pay attention to the fundamentals.”

Oil inched closer to $50 a barrel after lingering below the key level since late May in New York amid concerns that cuts by the Organization of Petroleum Exporting Countries and its allies including Russia will be offset by rising production from other countries. Saudi Arabia promised deep cuts to crude exports in August and the latest earnings results show some of the world’s biggest oil companies are leaving the worst downturn in a generation behind.

West Texas Intermediate crude for September delivery rose 29 cents to settle at $49.04 a barrel on the New York Mercantile Exchange. Total volume traded was about 27 percent above the 100-day average. The U.S. benchmark rose closer toward its 200-day moving average of about $49.42 a barrel.

Brent for September settlement climbed 52 cents to end the session at $51.49 a barrel on the London-based ICE Futures Europe exchange. The global benchmark traded at a premium of $2.45 to WTI.
more at:  https://www.bloomberg.com/news/articles/2017-07-26/crude-oil-holds-advance-above-48-as-u-s-supplies-decrease