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By Scott DiSavino
NEW YORK (Reuters) – Oil prices rose for the first time in three days on Wednesday, boosted by an early Wall Street rally ahead of a news conference by U.S. President-elect Donald Trump, and also lifted by news of Saudi supply cuts to Asia.
Oil’s gains came despite government data showing a bigger-than-expected weekly build in U.S. crude and fuel inventories.
Wall Street shares rose early ahead of the speech in which Trump was expected to provide more details about his plans for the world’s largest economy. Once Trump started speaking, stocks pared gains and the S&P 500 index slipped into negative territory. [.N]
Brent was up $1.42, or 2.7 percent, at $55.06 a barrel by 11:17 a.m. EST (1617 GMT). U.S. West Texas Intermediate (WTI) rose $1.30, or 2.6 percent, to $52.12 per barrel.
That put both contracts on track for their biggest daily percentage gains since Dec. 1. On Tuesday, Brent and U.S. crude futures settled at their lowest levels in a month.
“We expect some bullish OPEC rhetoric to ramp up in an attempt to neutralize the bearish vibes that have emanated from the recent production increases indicated out of Libya, Iran, Iraq and Nigeria,” Jim Ritterbusch, president of Chicago-based energy advisory firm Ritterbusch & Associates, said in a note.
Saudi Arabia, the world’s top oil exporter, has told some of its Asian customers that it will reduce their crude supplies slightly in February.
Still, there is plenty of oil to fill gaps left by OPEC. North American drilling is on the rise, while European and Chinese traders are shipping a record 22 million barrels of crude from the North Sea and Azerbaijan to Asia this month.
OPEC’s No. 2 producer Iraq plans to raise crude exports from its southern port of Basra to an all-time high of 3.641 million bpd in February.
U.S. crude production was projected to rise by 110,000 barrels per day in 2017 to 9 million bpd, according to U.S. Energy Information (EIA) data.
Separately, EIA said Wednesday U.S. crude inventories increased by 4.1 million barrels last week.
That topped both the 1.2 million barrel build that analysts forecast in a Reuters poll and the 1.5 million barrel build in data Tuesday from the American Petroleum Institute, an industry group.
“It is one the most uniformly bearish reports in some time,” said John Kilduff, partner at energy hedge fund Again Capital in New York.
(Additional reporting by Amanda Cooper in London and Henning Gloystein in Singapore; Editing by Marguerita Choy and Ruth Pitchford)
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