Futures Movers: U.S. crude prices surge on optimism over shrinking supply
Oil prices shot higher on Wednesday on rising optimism that official U.S. supply data due later will show a drop in stockpiles.
January crude CLF8, +1.76% climbed 85 cents, or 1.5%, to $ 57.68 a barrel, after settling up 0.7% at $ 56.83 a barrel on Tuesday. January Brent LCOF8, +0.96% rose 47 cents, or 0.8%, to $ 63.04 a barrel.
Hopes were building that the Energy Information Administration will report falling stockpiles when it reports Wednesday morning, after estimates from the American Petroleum Institute reportedly late Tuesday showed U.S. crude supplies dropped by 6.4 million barrels for the week ended Nov. 17. The data showed a rise of 869,000 barrels in gasoline stockpiles, while inventories of distillates fell by 1.7 million barrels, sources said.
Analysts polled by S&P Global Platts expect the EIA to report a decline of 2.1 million barrels for crude inventories. They also forecast a rise of 1 million barrels for gasoline and a draw of 1.8 million barrels for distillate supplies.
The drop in inventories would follow a surprise increase a week earlier, which pulled oil futures down from their highest levels since mid-2015.
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Still, oil prices remain rangebound ahead of a meeting of the Organization of the Petroleum Exporting Countries next week. The cartel’s members and non-OPEC producers, including Russia, are expected to extend a deal to reduce production and bring down the global supply.
“We think there is some danger of a short-term market disappointment,” Standard Chartered cautioned, adding that “reality seems more likely to disappoint than surprise to the upside.”