Oil prices rise as Saudi Arabia cuts supply to United States

CNBC

  • Both U.S. crude futures and international Brent futures saw gains.
  • The price rise came after a report from the U.S. Energy Information Administration (EIA) on Wednesday showed a drop in Saudi crude supply to the United States.

A truck used to carry sand for fracking is washed in a truck stop in Odessa, Texas.

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A truck used to carry sand for fracking is washed in a truck stop in Odessa, Texas.

Oil prices rose for a third day on Thursday, pushed up by signs of lower imports into the United States as part of efforts by OPEC to tighten the market.

U.S. West Texas Intermediate (WTI) crude futures were at $54.58 per barrel at 0249 GMT, up 35 cents, or 0.7 percent, from their last settlement. WTI closed up 1.7 percent on Wednesday, when prices touched their highest since Nov. 21 at $54.93 a barrel.

International Brent crude oil futures were up 52 cents, or 0.8 percent, at $62.17 per barrel.

The price rise came after a report from the U.S. Energy Information Administration (EIA) on Wednesday showed a drop in Saudi crude supply to the United States.

“Crude oil prices were stronger after signs emerged that OPEC cuts are impacting trade. EIA’s weekly report showed that U.S. imports from Saudi Arabia fell by more than half from the previous week to 442,000 barrels per day (bpd). This is the second lowest level in weekly data going back to 2010,” ANZ bank said.

Saudi Arabia is the de-facto leader of the Organization of the Petroleum Exporting Countries (OPEC), which together with some non-OPEC producers, including Russia, announced supply cuts late last year aimed at tightening the market and propping up prices.

Despite these efforts, oil remains in ample supply, not least because of soaring U.S. crude oil production, which jumped by more than 2 million bpd last year to a record 11.9 million bpd.

This shows in high U.S. commercial crude oil stockpiles, which rose by 919,000 barrels in the week to Jan. 25, to 445.94 million barrels, EIA data showed. Stockpiles are 6.6 percent higher than a year ago.