Ejiofor Alike with agency reports
Crude oil prices rose wednesday to their highest in more than a week despite a surprise build in crude oil inventories, as buyers were encouraged by a small weekly decrease in United States production.
The US Energy Information Administration (EIA) said crude oil stocks rose by 118,000 barrels during the week ended June 23, while weekly production declined by 100,000 barrels per day (bpd) to 9.3 bpd.
Reuters reported that the production decline also came after US output reached almost 9.4 million bpd during the prior week, the most since August 2015.
Global benchmark crude oil was yesterday up 55 cents, or 1.2 per cent at $47.20 a barrel, while US West Texas Intermediate crude oil was up 44 cents, or 1 per cent, at $44.68 per barrel.
That was the highest since June 19 for both contracts, which are on track for a fifth straight day of gains for the first time since mid May.
Both contracts were up about 5 percent since June 21 when Brent fell to a seven-month low of $44.35 and US fell to a 10-month low of $42.05.
Oil rose after the EIAâ€™s weekly inventory report, even though data showed a build instead of the 2.6 million barrel draw that analysts had forecast in a Reuters poll.
Some analysts believe the sell-off was overdone.
Head of the worldâ€™s largest independent oil trader, Vitol, Ian Taylor, said Brent would stay in a range of $40-$55 a barrel for the next few quarters as higher US production slows a rebalancing of the market.
Still, global supplies are still ample despite the output cuts by the Organisation of the Petroleum Exporting Countries (OPEC) and other producing countries of 1.8 million barrels per day (bpd) from January 2017.
OPEC and the other producers, trying to reduce a crude oil glut, agreed in May to extend the supply cut through March 2018.
Still, crude oil prices have been pressured on rising production from the United States and from Nigeria and Libya, two OPEC members that were exempted from cutting output.
OPEC delegates have said they would not rush to cut crude oil output further or end the exemptions, although a meeting in Russia next month is likely to consider further steps to support the market.