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Oil Prices Near Flat Amid Fall in U.S. Inventory

© Reuters.
© Reuters.

Investing.com – Oil prices traded near flat after the Energy Information Administration (EIA) reported the first drawdown in crude stocks in four weeks.

U.S. last traded at $63.80 by 1:35 AM ET (05:35 GMT), while international was unchanged at $71.61.

Overnight, the EIA said crude stockpiles fell by 1.4 million barrels last week, higher than the 1.2 million-barrel drop forecast by the market. Crude inventories had built by roughly 17 million barrels in three previous weeks.

The EIA also reported that gasoline inventories declined by 1.17 million barrels, compared to expectations for a draw of 2.13 million barrels.

Distillate stockpiles, however, dropped by just 0.36 million barrels, compared to forecasts for a decline of 0.85 million.

Oil prices have been supported this year by an agreement reached by the Organization of the Petroleum Exporting Countries (OPEC) and its allies to reduce their oil output by 1.2 million barrels per day since the beginning of 2019.

In June, they will decide whether to continue to curb their production, although recent reports suggested that Russia is reluctant to extend the current production cut agreement.

The oil market is also supported by steady economic growth in China.

Its economy grew by 6.4% in the first quarter, official data showed on Wednesday. Analysts had expected growth to slow to 6.3%.

Meanwhile, U.S. sanctions on OPEC members Venezuela and Iran were also cited as tailwind for oil prices.

Traders are also closely monitoring developments in trade talks between China and the U.S., the world’s two biggest oil importers.

Citing two people familiar with the matter, Bloomberg reported that the two sides are aiming for an early May announcement on a trade agreement.

Officials are hoping to announce the two countries have struck a deal and when Chinese Vice Premier Liu He travel to Washington for negotiations in the first week of May, according to the report.

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Source: Investing.com