Crude prices continued gaining on Thursday driven by the unexpected drop in US inventories and supply shortfalls in Canada and Nigeria. North Sea benchmark Brent was trading at $48.01 a barrel, its highest price since November. US West Texas Intermediate (WTI) reached a six-month high of $46.64 per barrel. Data from the US Energy Information Administration (EIA) showed that crude inventories fell 3.4 million barrels in the week ending May 6, below analysts’ expectations. Gasoline and distillate inventories also declined. According to EIA, crude output fell to 8.8 million barrels a day last week which is the lowest level since September 2014.
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The Organization of the Petroleum Exporting Countries kept forecasts for global oil supply and demand unchanged Monday, after its members broke off a meeting earlier this month without reaching an agreement on oil output. Global oil demand will increase by 1.2 million barrels a day this year to 94.18 million a day, led by India, the group’s Vienna-based research department said in the monthly report. Non-OPEC production will fall by 740,000 barrels a day from 2015 to 56.4 million barrels a day this year. The downward revisions in Canada, Brazil and Colombia broadly offset upward revisions in the U.S., U.K., Russia and Azerbaijan.
“Market players will continue to focus on inventory changes as well as OPEC and non-OPEC compliance,” said Giovanni Staunovo, an analyst at UBS Group AG. “Investors are in a wait-and-see mode, on the lookout for the next material decline in OECD oil inventories.” West Texas Intermediate for May delivery was at $51.41 a barrel, up 26 cents, on the New York Mercantile Exchange at 7:42 a.m. local time. Total volume traded was about 21 percent below the 100-day average. The contract gained 12 cents to $51.15 on Wednesday. Brent for June settlement rose 0.6 percent to $54.71 a barrel on the London-based ICE Futures Europe exchange after climbing 19 cents to $54.36 on Wednesday. The global benchmark crude traded at a premium of $2.85 to WTI for June. click Read More below for more of the story