USA oil jumps after data shows surprise United States stock draw

  • USA oil jumps after data shows surprise United States stock draw

USA oil jumps after data shows surprise United States stock draw

Saudi Arabia's announcement of increased production, though still within limits of the agreement within OPEC, also contributed to the price decline.

Over the previous year, the depressed commodity prices forced several U.S. oil and gas producers to reduce their output in order to sustain their operations.

The draw was mainly due to the drop in imports, particularly those from members of the Organization of the Petroleum Exporting Countries who are cutting production to comply with an agreement they signed with Russian Federation a year ago.

Oil hovered around three-month lows on Monday, as rising US inventories and drilling activity offset optimism over OPEC's efforts to restrict crude output.

Beyond OPEC, oil production rose 90,000 bpd in February, as increasing USA output offset declines elsewhere.

The Saudi energy ministry rushed out a rare statement on Tuesday evening re-asserting its commitment to "stabilising the global oil market", according to a report in the Financial Times. It had been hailed as the de facto end to a two-year price war that had pushed crude from over $100 a barrel to under $30 at its low point a year ago. US-traded West Texas Intermediate (WTI) is being pummeled even worse-it is down by 2% this morning, to $47.41 a barrel. OPEC's second-biggest producer pumped 4.414 million bpd last month.

The Energy Information Administration will report updated USA stockpile and production data at 10:30 a.m. ET.

Elsewhere, Brent oil for May delivery on the ICE Futures Exchange in London dipped 11 cents to $51.70 a barrel.

Exports from these countries moved into storage and points to why United States stocks hit record levels last week, the IEA said.

According to the document that reached Angop on Wednesday, the country closed the year 2016 with a production of 1.73 million barrels per day against 1.577 million barrels per day of Nigeria. The contracts ended 89 cents and $1.14 higher respectively Wednesday.

Stat of the day comes from the EIA, which shows that crude by rail in the USA averaged 477,000 bpd last year (including shipments from Canada), down from 754,000 in the year prior.

An informed source told Bloomberg that Saudi Arabia is committed to its agreement with OPEC.

Moreover, unlike Kilduff, other analysts are refusing to take the Saudi February increase as a passing blip on the radar: Bob Pisani, editor of CNBC On-Air-Stocks, called the kingdom's explanation for the rise (operational factors influenced by storage adjustments and other variables) "official gobbledygook".