Oil holding above $45 a barrel as production slips
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Futures slid as much as 0.9 percent in New York after rising 6.3 percent the previous two sessions to close above $45 a barrel. Production slipped for a seventh week to the lowest since October 2014, according to a report from the Energy Information Administration. Nationwide stockpiles rose by 2 million barrels to 540.6 million, the highest since 1929.
“Falling U.S. production” is among factors “fueling speculative purchases of oil futures,” said Giovanni Staunovo, an analyst at UBS Group AG in Zurich. “That said, the oil market remains oversupplied, as best visible in U.S. commercial oil inventories. Prices remain vulnerable to the downside in the short run.”
Crude has rebounded after slumping to the lowest since 2003 earlier this year amid signs the worldwide surplus will ease as U.S. production declines. Oil extended gains Wednesday after the Federal Open Market Committee signaled it remains positive about the nation’s growth and is less worried about risks posed by global economic weakness and financial-market turbulence.
West Texas Intermediate for June was trading at $45.40 a barrel on the New York Mercantile Exchange at about 7:40 a.m. Central. The contract gained $1.29 to $45.33 on Wednesday, the highest close since Nov. 4. Total volume traded was about 26 percent below the 100-day average.
Brent for June settlement lost as much as 44 cents, or 0.9 percent, to $46.74 a barrel on the London-based ICE Futures Europe exchange. The contract, which expires Friday, rose 3.2 percent to $47.18 Wednesday. The more-active July future rose 9 cents to $47.02. The global benchmark crude traded at a premium of $1.85 to WTI.
U.S. production dropped by 15,000 barrels a day to 8.94 million a day through April 22, according to the EIA report Wednesday.
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