Oil prices improve over signs of fall in U.S. output

Global Oil Prices Edge Higher on China Data, Slowing US Production Signals

Oil in Global Economy Series: US operating rigs rise again for 25 times in 26 weeks

U.S. West Texas Intermediate (WTI) crude futures were at $46.64 per barrel, up 10 cents, or 0.2 percent.

After the numbers of operating oil rigs declined in the last to last week, the operating oil rigs posted a rise for the 25th time in last 26 weeks.

The Senior Analyst at Interfax Energy's Global Gas Analytics Abhishek Kumar said in London: "U.S. gasoline demand remains lackluster and gasoline stocks are still above the five-yea average, which will cap gains in crude and gasoline prices". However, the slower pace of additions, as well as a much larger-than-expected decline in US crude stocks reported by the Energy Information Administration last week of 7.6 million barrels, suggests the torrid pace of American production could be easing.

Industrial service company Baker Hughes reported that U.S. drillers added two rigs in the week ending 14 July that brought the total number to 765. In last week, there was an increase of 2 operating rigs in the U.S., pushing the total number to 765, the highest since April 2015.

Crude throughput at Chinese refineries rose by 2.1% month-on-month June to 11.26m barrels a day, its second-highest level ever. In May, OPEC producers and 11 participating non-OPEC countries including Russian Federation formally ratified the agreement first drafted last November to cut supplies by 1.76 million barrels per day for an extension.

The number was just short of December's record high of 11.26 million bpd.

"There are some encouraging signs that things are getting better for crude, last weeks healthy stock draws in the USA and the rig count slowly but surely not increasing at the rates they were earlier on in the year, but fundamentally we are still in an oversupplied market", said Matt Stanley, fuel broker with Freight Investor Services (FIS). Most price changes since 2015 have occurred in the first half, or towards the end, of a year.

The traders noted the recommendations from the Organization of the Petroleum Exporting Countries (OPEC) that the oil market will see an excess next year also weighed on Wednesday's price gains.

Latest News