Yemisi Izuora
Oil futures held steady on Thursday as a drop in crude exports from Saudi Arabia and a draw in U.S. oil inventories supported prices, while a strengthening dollar kept futures in check.
Brent crude futures were higher at $71.73 a barrel up 11 cents from their last close and near Wednesday’s five-month high of $72.27, while U.S. West Texas Intermediate (WTI) crude futures were down 10 cents at $63.66 a barrel.
Saudi Arabia’s crude oil exports fell by 277,000 barrels to just under 7 million bpd in February from the month before, according to data from the Joint Organizations Data Initiative (JODI).
U.S. crude, gasoline and distillate inventories fell dropped week, with crude posting an unexpected drawdown, the first in four weeks, the Energy Information Administration (EIA) data showed on Wednesday.
“Although we viewed yesterday’s EIA guidance as bullish on balance, the market’s response to the data has thus far been muted,” Jim Ritterbusch, president of Ritterbusch and Associates, said in a note. “As a result, we are maintaining a view that WTI will need to see some fresh highs within the next 2-3 sessions if this year’s bull move is to prove sustainable.”
U.S. energy companies this week cut the number of oil drilling rigs for the first time in three weeks as production growth forecasts from shale, the country’s largest oil fields, continue to shrink.
The U.S. rig count, an early indicator of future output, fell by eight in the week ending April 18, General Electric Co’s Baker Hughes energy services firm said in its weekly report, which was released a day early because of the Good Friday holiday.
The dollar gained on strong U.S. retail sales data and the euro eased from weak manufacturing numbers, weighing on crude futures. A stronger dollar makes oil more expensive for non-U.S. buyers.
U.S. equities were modestly higher in trading ahead of a long Easter weekend.
Oil has been driven up this year by an agreement reached by the Organization of the Petroleum Exporting Countries and its allies, including Russia, to limit their oil output by 1.2 million bpd.
Global supply has been tightened further by U.S. sanctions on OPEC members Venezuela and Iran.
Iran’s crude exports have dropped in April to their lowest daily level this year, tanker data showed and industry sources said, suggesting a reduction in buyer interest ahead of expected further pressure from Washington.
“The market is taking a pause because we don’t really have a decision on that,” said Phil Flynn, an analyst at Price Futures Group in Chicago.