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Oil prices rise after weekly data show big drop in U.S. inventories

Oil prices rise after weekly data show big drop in U.S. inventories

Oil prices rose slightly on Thursday, ending a four-day selloff, after the U.S. government released data showing crude inventories plunged last week.
In its latest weekly report, the Department of Energy said crude-oil inventories declined last week by 8.1 million barrels to 321 million barrels, dipping below year-ago levels of 323.3 million barrels.
The shrinking supply was not a total surprise: foul weather along the Gulf Coast delayed oil shipments, forcing refiners to draw down inventories. U.S. imports have fallen by 567,000 barrels-a-day in the past four weeks, according to government data, as higher prices in Europe have attracted supplies.
But the magnitude of last week's inventory drop was larger than expected, analysts said.
"This was outside the range of expectations," said Citigroup analyst Tim Evans, who believes steadily declining inventories in the U.S. and shrinking OPEC output will keep upward pressure on oil prices well into 2007.
Although U.S. crude oil inventories are 8 percent above their five-year average for this time of year, Evans noted that supplies have dwindled by 67 million barrels since early October.
"At some point, it's not a one-off decline. It's a trend," Evans said.
Prices have settled lower during the past four consecutive trading sessions, closing at their lowest level in a month on Wednesday amid depressed demand for home-heating fuels.
On Thursday, light sweet crude for February delivery climbed 16 cents to $60.50 a barrel on the New York Mercantile Exchange.
In London, Brent crude futures climbed 37 cents to $60.89
The nation's gasoline supply increased by 3 million barrels last week as refinery activity picked up. Inventories of unleaded stood at 203.9 million barrels, compared with 207.3 barrels a year earlier. The U.S. supply of distillate, which includes heating oil and diesel, increased by 500,000 barrels to 133.6 million barrels, compared with 135.3 million barrels a year ago.
Crude futures settled below $61 a barrel on Wednesday for the first time since Nov. 28, when prices ended at $60.99.
Natural gas prices have also taken a dive in recent weeks due to mild U.S. weather. January futures expired Wednesday at $5.838 per 1,000 cubic feet, the lowest value for the front-month contract in more than 12 weeks.
On Thursday, February natural gas futures gained 14 cents to trade at $6.27 per 1,000 cubic feet.
In other Nymex trading, heating oil rose 1.12 cent to $1.62 a gallon, while gasoline futures rose by 2.25 cents to $1.61 a gallon.
Prices slid last week as slower economic growth and expectations of a mild winter outweighed OPEC's determination to tighten up worldwide supplies.
The Organization of Petroleum Exporting Countries said earlier this month that it plans to reduce output by an additional 500,000 barrels a day beginning in February. That comes on top of a previously announced cut of 1.2 million barrels per day.


Updated : 2021-04-18 09:46 GMT+08:00