Crude breaks $65 as record drawdown whittles USA oil stockpiles

Crude breaks $65 as record drawdown whittles USA oil stockpiles

Price have been supported by supply restrictions led by the Organization of the Petroleum Exporting Countries (OPEC) and Russian Federation, the world's biggest oil producer.

Brent crude futures also traded 0.4% higher of 27 cents to trade at $69.31 per barrel close to its previous three-year high of $70.37 per barrel last week.

U.S. West Texas Intermediate crude futures ended yesterday's trading session up $1.14, or 1.8%, at $65.61 a barrel - the highest closing level since December 5, 2014.

On Wednesday, the U.S. Energy Information Administration reported that U.S. crude inventories fell for a record 10 straight week to the lowest since February 2015. The oil for delivery in March was trading higher by Rs 70 or 1.69 per cent at Rs 4,201 per barrel in 114 lots.

United States crude production rose to 9.9 million barrels per day last week, nearing the all-time record of 10.04 million bpd set in 1970, the EIA data showed.

The drop also comes at a time of global economic growth raising hopes for growing demand.

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Oil retreated late on Thursday as the USA dollar rebounded from early losses and strengthened, denting support for the latest crude rally, but tight US supplies limited the commodity's decline. Seven analysts expect stockpiles to fall, and two expected them to rise. "The arbitrage is blocked because of a wider Brent-Dubai spread", said a trader with a North Asian refiner, adding that the lower arbitrage volume supports prices for light grades.

Gasoline inventories rose by 3.1 million barrels and stocks of distillate fuels, which include diesel, were up by 639,000 barrels.

In May, the parties to the agreement agreed to extend the deal until the end of March 2018.

In November 2016, the OPEC summit was held in Vienna, where OPEC members reached an agreement on reducing oil output by 1.2 million barrels per day. The arbitrage "gives the incentive to export refined products".

Oil prices were firm on Wednesday, receiving ongoing support from healthy economic growth as well as from supply restrictions led by a group of producers around the Organization of the Petroleum Exporting Countries (OPEC) and Russian Federation.

Surging supplies of American oil played a major role in the price collapse of 2014.