Crude Oil Prices Settle Sharply Higher Amid Plunge in U.S. Stockpiles

Investing.com – WTI crude oil prices Wednesday settled at their highest level since November 2014, supported by a massive draw in U.S. crude supplies, and unexpected supply outages in Libya and Canada.

On the New York Mercantile Exchange for July delivery rose 3.2% to settle at $72.76 a barrel, while on London’s Intercontinental Exchange, rose 1.42% to trade at $77.22 a barrel.

Inventories of U.S. crude fell by 9.891 million barrels for the week ended June 22, topping expectations for of 2.572 million barrels, according to data from the Energy Information Administration (EIA).

The drop in U.S. crude supplies – the largest since September 2016 – came as domestic crude exports rose to a record of 3 million barrels per day amid higher international demand and supply outages in both Libya and Canada.

A power struggle in Libya between rebels and the government has hampered the country’s oil exports, while a production shutdown at Canada’s Syncrude – which has capacity to produce 350,000 barrels per day of oil – continued to drain crude supply across North America.

Gasoline inventories – one of the products that crude is refined into – by 1.156 million barrels, just below expectations for a build of 1.156 million barrels, while supplies of distillate – the class of fuels that includes diesel and – by 0.015 million barrels, well below expectations for a build of 0.774 million barrels.

U.S. oil output, meanwhile, remained at a record 10.9 million bpd, according to the EIA.

Oil prices were also supported by ongoing expectations for a slump in Iranian crude exports following the United States warning to countries Tuesday to cease buying Iranian crude by Nov. 4.

Upcoming U.S. sanctions against Iran – OPEC’s third largest producer – could see global crude supplies come under pressure as the Islamic Republic exports more than 2 million barrels of oil day.

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