NEW YORK: US crude futures rose on Wednesday, supported by a drop in domestic inventories, while Brent fell ahead of an OPEC meeting later this week that may result in increased global production.
US crude inventories fell 5.9 million barrels last week, the largest one-week decline since January, the Energy Information Administration said on Wednesday.
Refineries’ crude runs rose to 17.7 million barrels per day, the highest on record for this time of year, the EIA data showed.
“A jump in refinery runs to 17.7 million bpd – just shy of the all-time record set last summer – has yielded the biggest weekly draw to crude stocks since January,” said Matthew Smith, director of commodity research at ClipperData in Louisville, Kentucky.
“Given the lofty heights of refining activity, we shouldn’t be too surprised to see solid builds to both gasoline and middle distillates.”
US West Texas Intermediate (WTI) crude futures for July delivery, which expires on Wednesday, rose 63 cents to $65.70 a barrel, a 1 percent gain, by 1:28 p.m. EDT (1728 GMT). WTI futures for August rose 65 cents to $65.55.
Brent crude futures for August delivery slipped 31 cents, or 0.4 percent, to $74.77 a barrel.
Traders said a drop in Libyan supplies, including the loss of a 400,000-barrel storage tank, also helped support prices.
Libya’s oil output has been slashed to between 600,000 and 700,000 bpd from more than 1 million bpd following clashes at its Ras Lanuf and Es Sider oil terminals, a Libyan oil source said.
An attack by armed factions opposed to Khalifa Haftar’s Libyan National Army (LNA) has forced the closure of the two ports since June 14 and the declaration of force majeure on exports.
Looming large over markets, however, were meetings scheduled on June 22-23 in Vienna for the Organization of the Petroleum Exporting Countries and other big producers, including Russia.
Brent futures fell after Saudi Energy Minister Khalid al-Falih said that the market demands more oil in the second half of this year and that OPEC was converging on a good decision on production policy this week.
“Any developments on OPEC can move us,” said Phil Flynn, analyst at Price Futures Group in Chicago.
Saudi Arabia is trying to convince fellow OPEC members of the need to raise oil output, sources familiar with the talks said on Wednesday.
Russia, which is not a part of OPEC but is the world’s biggest oil producer, is also pushing to loosen supply controls introduced to prop up prices in 2017.
Other OPEC members, including Iran, oppose such a move, fearing a price slump.
Iran signaled it might allow a small increase in OPEC oil output, letting some OPEC members that had overdelivered on cuts return to compliance with quotas.
That would effectively mean a modest boost from producers such as Saudi Arabia that have been cutting more deeply than planned despite production outages in Venezuela and Libya.
“Brent is following the OPEC story much more closely than WTI,” said Rob Haworth, senior investment strategist for US Bank Wealth Management.
Brent’s premium to WTI