Oil up on lower-than-expected rise in U.S. crude stockpiles
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[February 07, 2024] By
Paul Carsten
LONDON (Reuters) - Oil prices rose for a third day on Wednesday after
U.S. crude inventories grew less than expected and a cut in the forecast
for output growth in the U.S., the world's biggest producer, eased
concerns about potential oversupply.
Brent crude futures rose 56 cents to $79.15 a barrel as of 1159 GMT,
while U.S. West Texas Intermediate crude climbed 59 cents to $73.90.
U.S. crude stocks fell well short of analysts' forecasts, American
Petroleum Institute figures showed. U.S. government weekly data on
inventories will be released later on Wednesday. [EIA/S]
The U.S. Energy Information Administration (EIA) also cut on Tuesday its
2024 outlook for domestic oil output growth, putting it far lower than
last year's increase and predicting it would not reach December 2023's
record levels until February 2025.
This all strengthened the case that the oil market will be balanced in
2024, analysts at Haitong Futures said in a note, adding that oil prices
should remain in a $10 range around current levels.
Meanwhile, U.S., Qatari and Egyptian mediators prepared a diplomatic
push to bridge differences between Israel and Hamas on a ceasefire plan
for Gaza after the Palestinian group responded to a proposal for an
extended pause in fighting and hostage releases.
Hamas has proposed a ceasefire plan that would quiet the guns in Gaza
for four-and-a-half months, during which all hostages would go free,
Israel would withdraw its troops from the Gaza Strip and an agreement
would be reached on an end to the war, Reuters reported on Wednesday.
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The sun sets behind the chimneys of the Total Grandpuits oil
refinery, southeast of Paris, France, March 1, 2021.
REUTERS/Christian Hartmann
Traders are following the situation in the Middle East, especially
Iranian-backed Houthi rebels' attacks on shipping in the crucial Red
Sea that have disrupted traffic through the Suez Canal, the fastest
sea route between Asia and Europe and one that carries nearly 12% of
global trade.
"While we are seeing disruptions to trade flows as a result of Red
Sea developments, oil production remains unchanged as a result," ING
analysts Warren Patterson and Ewa Manthey said in a note, commenting
on oil's current lack of a risk premium.
In the longer term, the International Energy Agency (IEA) said on
Wednesday that India is expected to be the largest driver of global
oil demand growth between 2023 and 2030, narrowly taking the lead
from top importer China.
That comes as struggling large economies, including China's, dent
confidence in the global oil demand outlook.
In Germany, industrial production fell more than expected in
December, the federal statistics office said, highlighting weakness
in the backbone of Europe's largest economy.
(Reporting by Paul Carsten in London and Arathy Somasekhar and Muyu
Xu; Editing by Paul, Christian Schmollinger, Louise Heavens and
David Evans)
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