Oil prices jumped more than 1 percent on Tuesday, hitting 2016 highs, with U.S. crude settling above $50 a barrel the first time in almost a year, on expectations of domestic stockpile draws and worries about global supply shortfalls from attacks on Nigeria’s oil industry.
U.S. crude stockpiles likely fell by 2.7 million barrels last week to mark a third straight week of declines, an updated Reuters poll showed. [EIA/S]
A report by trade group American Petroleum Institute (API), released after prices settled, showed a higher-than-expected crude draw of 3.6 million barrels.
The U.S. Energy Information Administration (EIA) will issue official inventory numbers on Wednesday.
U.S. crude’s West Texas Intermediate (WTI) futures CLc1 settled up 67 cents, or 1.4 percent, at $50.36 a barrel. It was WTI’s first settlement above $50 since July 2015. The session high was $50.53, a peak from October.
Brent crude futures LCOc1 settled up 89 cents, or 1.8 percent, at $51.44 a barrel. In post-settlement trade, Brent reached $51.54, a peak since October.
Both Brent and WTI have almost doubled in value since winter, when they hit their lowest since 2003.
In its latest short-term energy outlook issued on Tuesday, the EIA said it expects U.S. crude production declines for 2016 and 2017 to remain unchanged from a month ago.
Production will fall by 830,000 bpd this year to 8.6 million bpd, and drop next year by 410,000 bpd to 8.19 million bpd, the agency said.
The EIA also raised its 2016 U.S. oil demand growth forecast.