Oil price hits three-year high, oil stocks gain

  • Oil price hits three-year high, oil stocks gain

Oil price hits three-year high, oil stocks gain

USA crude inventories fell by 4.95 million barrels last week, the eighth consecutive drop, EIA data show.

Fatih Birol, head of the Paris-based International Energy Agency, said on Friday that oil prices at US$65 to US$70 a barrel risked encouraging more oversupply from United States shale drillers.

Commerzbank noted that China imported 7.95M barrels of crude oil per day in December - 12% less than in November, which was a very strong month.

Futures added as much as 1.3% in NY to the highest intraday level in nearly three years.

US crude inventories probably dropped by 3.75 million barrels last week, according to a Bloomberg survey before the EIA report.

A market survey of more than 1,000 energy professionals conducted by Reuters in January showed crude price expectations in a range of $60 to $70 per barrel for 2018.

But other analysts are highlighting the increasing levels of U.S. oil production as a potential barrier to prices maintaining high levels this year.

The latest rally has been due to the production cuts imposed by the Organisation of the Petroleum Exporting Countries (OPEC) and decline in oil inventories.

Total products supplied over the last four-week period averaged 20.6 million barrels per day, up by 5.6 percent from the same period past year.

"While we're seeing sales prices run up, our services and service costs are running up as well", he said. The figures were massive and this is the first time since they managed to hit %63 mark, the last time was December of 2014.

Brent for March settlement gained as much as 51c, or 0.8%, to $68.29 a barrel on the London-based ICE Futures Europe exchange after adding 0.2% on Monday.

Gasoline production also decreased, averaging 9.5 million barrels per day as did distillate fuel production, averaging 5.3 million barrels per day.

Craig at Platts, meanwhile, said gasoline demand could inch lower and it may be a matter of time before oil prices reverse course. Analysts had expected a smaller, 2.625-million-barrel build. Analysts warned the market is not paying enough attention to US production increases. Still analysts are cautious of its long-term prospects as U.S. shale is expected to continue to eat away at OPEC's production cut efforts as prices rise, although that caution appears to be weakening somewhat as prices continue to hold.

There was a flat December figure for nonagricultural export prices, and a 0.2% drop for import prices ex-oil.