Oil prices in New York rose above $50 a barrel today for the first time since June, boosted by lower US petroleum inventories.
The drop in US oil inventories in yesterday’s weekly US report added to momentum after last week’s OPEC announcement of a plan to cut output.
Near 1840 IST, US benchmark West Texas Intermediate for delivery in November was at $50.25 a barrel, up 38 cents in intraday trade.
Yesterday’s report from the US Department of Energy showed a drop of three million barrels in US commercial crude- oil inventories and lower US oil production for the week ending September 30.
“We’re still reacting to yesterday’s EIA (DOE) report with the stocks down three millions barrels,” said James Williams of WTRG Economics. “That was a pretty bullish report.”
Oil prices have also pushed higher after last week’s decision by the Organisation of the Petroleum Exporting Countries to cut output, with details to be finalized at a Vienna meeting on November 30.
Oil prices have strengthened even as analysts have expressed skepticism that OPEC will follow through on the plan.
“Although OPEC announced a week ago that it intended to cut its output, the battle for market shares appears to be far from over,” said Commerzbank.
“Indeed Saudi Arabia has lowered its November premiums for light oil shipped to the US, and increased its discounts for Asia and Europe. European consumers are even being offered the highest discount since February 2009.”