Crude oil prices advanced, extending the longest winning streak in more than a year, as US crude and petrol inventories declined.
Brent crude topped $50 a barrel in London trade for the first time since early last month. US crude supplies fell the most in five weeks, while fuel stockpiles slid a third week, US Energy Information Administration data show.
Opec is on course to agree to an output-freeze because its biggest members are pumping flat-out, said Chakib Khelil, the group’s former president. Oil has risen about 20% since slipping into a bear market earlier this month. A close at or above $47.42 a barrel would be more than 20% above the recent low, meeting the common definition of a bull market.
Russian energy minister Alexander Novak said that the nation was open to discussing a freeze after Saudi Arabian energy minister Khalid Al-Falih said that informal talks next month may lead to action to stabilise the market. A deal to cap production was proposed in February but a meeting in April ended with no accord. West Texas Intermediate for September delivery rose $1.37, or 2.9 percent, to $48.16 a barrel on the New York Mercantile Exchange, the highest intraday level since July 7.
Brent for October settlement advanced 93c, or 1.9%, to $50.78 a barrel on the London-based ICE Futures Europe exchange, the highest since June 23.
The contract had closed at $49.85 on Wednesday, 19% higher than its August low. The global benchmark crude traded at $1.94 over West Texas Intermediate for October delivery, after reaching the widest premium since December.
“West Texas Intermediate has been relatively tight and too tight to Brent,” said Michael Tran, a commodities strategist at RBC Capital Markets in New York. “The Atlantic Basin is probably tightening fundamentally faster than people think.”
US crude stockpiles fell by 2.5 million barrels last week to 521.1 million, the EIA reported. That compares with the median forecast in a survey for a 950,000-barrel increase. Petrol inventories declined by 2.7 million barrels to 232.7 million.
“Surprisingly large draws in crude and gasoline inventories made prices jump,” said Michael Poulsen, an analyst at Global Risk Management. Saudi Arabia, Iran, Iraq and non-member Russia are producing at, or close to, maximum capacity, said Mr Khelil. n Bloomberg
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