Global oil rises on U.S. inventory draw as OPEC beckons | Reuters

 Global oil rises on U.S. inventory draw as OPEC beckons
| Reuters

By Julia Simon
| New York

New York Oil prices rose on Wednesday after U.S. government data showed a decline in domestic crude inventories and strong refining activity in the world's largest oil consumer, ahead of next week's meeting of major oil producers.The Energy Information Administration said U.S. crude stocks declined for the sixth straight week. Gasoline and distillate inventories also declined. Brent crude rose 87 cents and stood at $52.52 per barrel by 11:31 a.m. EDT. U.S. light crude rose 71 cents to $49.37 a barrel.U.S. crude inventories fell by 1.8 million barrels for the week to May 12, less than the of 2.4 million barrels that had been forecast. But news of a draw lifted prices that had slumped in late trading on Tuesday the American Petroleum Institute had reported a build in crude stocks for the week.

"The crude oil drawdown disappointed some, but the fairly large rise in refinery utilization bodes well for crude oil demand in the coming weeks," said John Kilduff, partner at energy hedge fund Again Capital LLC in New York.U.S. crude production has climbed 10 percent since mid-2016 to 9.3 million bpd, close to top producers Russia and Saudi Arabia.

Matt Smith, director of commodity research at ClipperData, said the U.S. Gulf Coast led refinery activity higher. "Refinery runs over 750,000 bpd higher than year-ago levels for the U.S. has been enough to usher in a build - despite stronger imports. A triumvirate of draws for crude, gasoline and distillates is a supportive influence for prices."On May 25 the Organization of Oil Exporting Countries (OPEC) and other key producers will gather in Vienna to decide whether to extend output cuts of 1.8 million barrels per day (bpd) that were to run during the first half of 2017. Riyadh and Moscow say they should be extended until March 2018.

OPEC members Kuwait, Iraq and Venezuela have supported an extension to the supply cuts. Some analysts have said a deeper cut could even be on the table at the meeting next week.Jefferies bank said it was lowering its oil price forecasts due to the rise in U.S. production, cutting its Brent price estimate for the second half of 2017 to $59 per barrel from $61 previously.North Sea oil output, generally seen in terminal decline, is expected to jump by a net 400,000 bpd in the next two years with new projects and greater efficiencies. (Additional reporting by Sabina Zawadzki in London, Henning Gloystein in Singapore; Editing by Elaine Hardcastle and David Gregorio)

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Updated Date: May 17, 2017 22:00:10 IST