Oil futures climbed Wednesday, with the U.S. benchmark settling above $65 a barrel, after the Energy Information Administration reported a tenth weekly decline in row for U.S. crude stockpiles.
Natural gas, meanwhile, saw prices rally to their highest levels in more than a year as traders bet that forecasts that again call for frigid temperatures in parts of the U.S. will prompt further inventory declines.
March West Texas Intermediate crude climbed $1.14, or 1.8%, to settle at $65.61 a barrel on the New York Mercantile Exchange. It marked another settlement at its highest since Dec. 5, 2014. Brent for March tacked on 57 cents, or 0.8%, to $70.53 a barrel on the ICE Futures Europe exchange, the highest since Dec. 2, 2014.
The EIA reported that U.S. crude suppliers fell 1.1 million barrels for the week ended Jan. 19. Analysts surveyed by S&P Global Platts had forecast a decrease of 1.6 million barrels, while the American Petroleum Institute reported a rise of 4.8 million barrels. The EIA has reported crude-supply declines each week since the report released the day before Thanksgiving. The crude-supply draw was less than expected but still a draw—”starkly different from the API” data, said Tariq Zahir, managing member of Tyche Capital Advisors. Total domestic crude production, however, climbed by 128,000 barrels a day to 9.878 million barrels a day, according to the EIA data.
With U.S. production up again, “it would not surprise us with the overbought technical situation” to see prices give up some of the recent run up the market has seen, said Zahir. Among the products, gasoline stockpiles climbed by 3.1 million barrels for the week, while distillate stockpiles rose 600,000 barrels, according to the EIA. The S&P Global Platts survey forecast a supply rise of 2.1 million barrels for gasoline and a fall of 2.5 million barrels for distillates. On Nymex, February gasoline rose 0.4% to $1.916 a gallon, while February heating oil added 1% to $2.106 a gallon.
Over in Nigeria, a militant group in the Niger Delta has reportedly threatened to resume bombing on oil facilities in the region, raising concerns about production. In other energy trading, natural-gas futures saw their February contract climb 6.5 cents, or 1.9%, to end at $3.509 per million British thermal units after a 6.8% jump on Tuesday. The settlement was the highest level since Dec. 30, 2016.
