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Crude Rises Near $58 as Exports Surge, U.S. Storage Tumbles

….as Brent rises to $64.23 on the London-based ICE Futures Europe exchange

Crude climbed as a U.S. government report showed oil stockpiles in the world’s largest economy fell by the most in four months, Bloomberg has reported

According to the latest news report on the international oil market, futures in New York rose as much as 0.9 percent, briefly surpassing $58 a barrel for the first time in a week as American crude inventories tumbled by 6.5 million barrels last week, the Energy Information Administration confirmed today.

A survey conducted by Bloomberg indicated that was more than double the average estimate. This is even as exports surged by the most on record as West Texas Intermediate crude trades at an attractive discount to the global Brent benchmark.

Matt Sallee, who manage $16 billion in oil-related assets at Tortoise Capital Advisors LLC, said on telephone that “crude inventories are just taking a nose-dive”, adding that “clearly, that’s being helped out by the WTI discount, supporting pretty robust exports.”

Yet, gasoline stockpiles rose for a sixth week and diesel supplies unexpectedly edged higher.

Oil is on track for a yearly rise following a decision by the Organization of Petroleum Exporting Countries (OPEC) and its allies to extend supply cutbacks through the end of 2018.

Market analysts at Goldman Sachs Group Inc forecast that global stockpiles will remain below seasonal levels and continue to shrink through the second quarter of next year.

Saudi Arabian Oil Minister, Khalid Al-Falih said that he was optimistic about the global oil-cuts pact, while Kuwait’s Oil Minister, Bakheet Al-Rashidi, said compliance with the output cuts reached 122 percent in November, the highest monthly level since the agreement took effect in January.

WTI for February delivery advanced 36 cents to $57.92 a barrel at 11:44 a.m. on the New York Mercantile Exchange.

Brent for February settlement gained 43 cents to $64.23 on the London-based ICE Futures Europe exchange. The global benchmark crude traded at a premium of $6.31 to WTI.

Meanwhile, the U.S. crude inventories slipped to 436.5 million barrels last week, the lowest level since October 2015, while crude exports jumped by 772,000 barrels a day, the EIA data showed.

This is just as gasoline stockpiles climbed 1.24 million barrels, and distillate supplies increased by 769,000 barrels, more than triple what was forecast in a Bloomberg survey. Crude production remained at a record-high.

Analysts at Jefferies Group LLC raised their forecast for global crude prices by about 10 percent and said OPEC-led supply cuts and decelerating U.S. production will sop up a worldwide supply glut more quickly than expected next year.

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