Oil held near a four-month high after U.S. crude inventories plunged by the most since July, while Saudi Arabia pressed on with export cuts.
Futures slipped 0.5 percent in New York, having climbed above $60 a barrel on Wednesday for the first time since November. U.S. government data showed that nationwide stockpiles declined by 9.59 million barrels, while analysts had expected an increase. The country’s crude exports were near a record high, imports from Saudi Arabia fell by more than half and shipments from Venezuela stopped completely.
“The U.S. oil market is no longer oversupplied,” said Carsten Fritsch, an analyst at Commerzbank AG in Frankfurt. “Stocks normally increase at this time of the year, which makes the substantial inventory reduction all the more remarkable.”
Crude has rallied this year as output reductions by the Organization of Petroleum Exporting Countries and its partners, as well as supply disruptions in Venezuela and Iran, countered growing American shale production. Meanwhile, the U.S. Federal Reserve said interest rates could be on hold for “ some time,” thawing investor concerns over weakening global growth that would dampen oil demand.
West Texas Intermediate for May delivery was at $59.94 a barrel, down 29 cents, on the New York Mercantile Exchange at 10:50 a.m. in London. The April contract gained 1.4 percent to $59.83 before expiring on Wednesday.
Brent for May settlement was down 24 cents to $68.26 a barrel on the London-based ICE Futures Europe exchange, after rising 1.3 percent on Wednesday in a third session of gains. The global benchmark crude was at a premium of $8.33 to WTI.
American crude inventories declined by the most since July to 439.5 million barrels last week, while a Bloomberg survey of analysts forecast an increase of 1.75 million barrels. The country’s oil exports climbed to 3.39 million barrels a day, the second-highest weekly rate on record since 1993.
Still, nationwide crude stockpiles are above the five-year average of 432 million barrels for this time of the year. Surging U.S. production, which rose again last week to a record level of 12.1 million barrels a day, continues to undermine OPEC and its partners’ effort to trim a global surplus.
Federal Reserve officials scaled back their projected interest-rate increases this year to zero. Chairman Jerome Powell said Wednesday that incoming data indicate the central bank should “remain patient” as global risks weigh on the economic outlook and inflation continues to stay muted.
© 2019 Bloomberg L.P