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Published: Thu, April 19, 2018
Economy | By Melissa Porter

U.S. oil, gasoline stocks fall in latest week

U.S. oil, gasoline stocks fall in latest week

Crude oil futures surged back to 3-year highs after an industry report showed a significant drop in U.S. oil inventories.

Oil prices rose on Wednesday, lifted by a reported fall in USA crude inventories and by the ongoing risk of supply disruptions.

In addition, oil ministers from OPEC and non-OPEC countries will meet Friday in Saudi Arabia to discuss their production cut deal.

Weekly U.S. gasoline demand was at the strongest level ever seen in April, and strongest even for the peak vacation months of June, July and August, according to Tom Kloza, global head of energy analysis at the Oil Price Information Service.

The latest demonstration was oil prices' reaction to the Western strikes in Syria, which failed to result in any sustainable price increase after the initial jump. The U.S. has started talking to North Korea directly, President Donald Trump said on Tuesday, helping to buoy some equity markets.

Opec's ministerial committee tasked with monitoring the group's supply-cutting deal with non-Opec countries, led by Russian Federation, meets in the Saudi city of Jeddah on Friday."Despite an oil price of over US$70 per barrel and the fact that the oversupply has been eliminated, a phase-out of the production cuts will not be on the agenda", Commerzbank oil analyst Carsten Fritsch said.

West Texas Intermediate for May delivery climbed as much as $1.33 to $67.85/bbl on the New York Mercantile Exchange, the highest since December 2014. "As long as the geopolitical premium is here with us we should not sell off". Total volume traded was about 2% above the 100-day average.

Meanwhile, the forecast also calls for a draw of 1.9 million barrels for gasoline and 1.6 million for distillates. A Bloomberg survey before EIA data on Wednesday predicts an increase of 650,000 bbl. In its latest monthly Drilling Productivity Report, the EIA said that US shale production is expected to increase by 125,000 bpd in May over April, with the Permian production surging by 73,000 bpd, Eagle Ford's-by 24,000 bpd, and the Bakken's by 15,000 bpd. Potential measures could include new inventory targets that extend their output cuts, and laying the foundations for an alliance that will last for years.

OPEC's Joint Ministerial Monitoring Committee will recommend to OPEC whether the deal should be extended into 2019.

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