Crude Oil Prices Settle Higher Amid Massive Draw in U.S. Crude Supplies

Investing.com – WTI crude oil prices settled higher buoyed by data showing a massive draw in U.S. crude supplies for the second-straight week and investor expectations major oil producers may opt for a modest output hike at a meeting this week.

On the New York Mercantile Exchange for July delivery rose 1.8% to settle at $66.22 a barrel, while on London’s Intercontinental Exchange, fell 0.75% to trade at $74.52 a barrel.

Inventories of U.S. crude fell by 5.914 million barrels for the week ended June 15, topping expectations for of 2.100 million barrels, according to data from the Energy Information Administration (EIA).

A rise in refinery runs to 17.7 million barrels per day (bpd), underpinned a build in product inventories as both gasoline and distillate stockpiles increased by more than analysts had forecast.

Gasoline inventories – one of the products that crude is refined into – by 3.277 million barrels, confounding expectations for a build of just 0.188 million barrels, while supplies of distillate – the class of fuels that includes diesel and – by 2.715 million barrels, confounding expectations for a draw of 0.164 million barrels.

U.S. oil output, meanwhile, remained at a record 10.9 million bpd, after rising 100,000 bpd in the previous week, according to the EIA. That leaves the U.S. firmly positioned as the second largest oil producer behind Russia.

The mixed report on crude and product inventories came amid comments from Iranian Oil Minister Bijan Zanganeh, who signalled he may be open to a modest uptick in production.

Zanganeh said OPEC members that had cut output beyond levels specified in the production-cut agreement should return to compliance, easing fears that major oil producers like Saudi Arabia would hike output aggressively.

OPEC and its allies’ 1.8 million (bpd) production-cut agreement agreed in November 2016 has rid the market of excess crude supplies. The OPEC-led deal is expected to come under review at the oil-cartel’s meeting due Friday.

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