Oil Stays At 3-Year Highs as U.S. Crude Stocks Fall More Than Forecast

Investing.com – Crude prices held on to gains on Wednesday, staying close to their strongest level in around three years after data showed U.S. oil supplies fell more than forecast last week.

The U.S. Energy Information Administration said in its weekly report that crude oil inventories fell by in the week ended Jan. 5. That compared with analysts’ expectations for a decline of 3.9 million barrels, while the American Petroleum Institute late Tuesday reported a supply-drop of 11.2 million barrels.

Supplies at Cushing, Oklahoma, the key delivery point for Nymex crude, decreased by last week, the EIA said.

Total U.S. crude oil inventories stood at 419.5 million barrels as of last week, which the EIA considered to be in the middle of the average range for this time of year.

U.S. crude oil production fell by 290,000 barrels per day (bpd) to 9.49 million bpd.

The report also showed that gasoline inventories increased by , much higher than expectations for a gain of 2.6 million barrels. For distillate inventories including diesel, the EIA reported a rise of .

U.S. West Texas Intermediate (WTI) tacked on 32 cents, or about 0.5%, to $63.28 a barrel by 10:40AM ET (1540GMT). Prices were at around $63.34 prior to the release of the inventory data.

Meanwhile, futures, the benchmark for oil prices outside the U.S., were at $68.95 a barrel, up 11 cents from their last close. The contract rose to its best level since May 2015 earlier.

Oil prices continue to benefit from production cut efforts led by the Organization of the Petroleum Exporting Countries and Russia. The producers agreed in December to extend current oil output cuts until the end of 2018.

The deal to cut oil output by 1.8 million barrels a day (bpd) was adopted last winter by OPEC, Russia and nine other global producers. The agreement was due to end in March 2018, having already been extended once.

In other energy trading, lost 1.4 cents, or 0.8%, to $1.831 a gallon, while was unchanged at $2.070 a gallon.

shed 2.2 cents, or 0.8%, to $2.899 per million British thermal units. Prices have gained around 5% so far this week as investors reacted to the severe winter storm hitting much of the U.S. Eastern Seaboard.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.