Brent crude oil rose toward $50 a barrel on Wednesday as a drawdown in U.S. crude oil stocks outweighed the negative impact of weak economic manufacturing data from China. The American Petroleum Institute (API) said U.S. crude stockpiles fell 3.7 million barrels last week, with stocks at the Cushing, Oklahoma, delivery point for U.S. crude futures down almost 500,000 barrels. [API/S] Although total U.S. oil inventories are at record highs, the draw suggests a rebalancing of the biggest domestic oil market is under way as oil production slows in the face of low prices.
Futures dropped 0.2 percent in London, trimming this year’s increase to 52 percent. U.S. crude inventories unexpectedly expanded for a second week with a gain of 614,000 barrels last week, the Energy Information Administration reported Thursday. The latest data on U.S. drilling from Baker Hughes Inc. is due Friday, after the number of active oil rigs increased by 82 in the eight weeks to Dec. 23.
“2016 was a dramatic oil year,” said Bjarne Schieldrop, chief commodities analyst at SEB Markets. “2016 started very bearishly and ended very bullishly. 2017 is likely to be the opposite, but not quite as dramatic.”
Brent for March settlement dropped 9 cents to $56.76 barrel on the London-based ICE Futures Europe exchange as of 11:24 a.m. local time. The February contract expired Thursday after losing 8 cents to $56.14. Total volume traded was about 63 percent below the 100-day average.
West Texas Intermediate for February delivery was up 5 cents to $53.82 a barrel on the New York Mercantile Exchange. The contract fell 29 cents to $53.77 on Thursday. Prices are up 45 percent this year.