Oil Futures Reach Another High as Output Falls For Sixth Week

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Oil futures settled Wednesday at another high for the year, after U.S. government data showed a fall in weekly domestic crude production for a sixth straight week, according to Bloomberg MarketWatch.

Prices had seen sharp losses early in the session, pressured after Kuwait oil workers ended a strike that had reduced the country’s crude output over the last three days. Meanwhile, U.S. data revealed a climb in weekly crude inventories but the figure came in below what was reported by a trade group.

West Texas Intermediate crude oil for May, which expired at Wednesday’s settlement, tacked on $1.55, or 3.8%, to settle at $42.63 a barrel on the New York Mercantile Exchange. It was trading around $40.10 before the supply data. The June contract added $1.71, or 4%, to end at $44.18. Prices haven’t settled at levels this high since November.

June Brent crude on London’s ICE Futures Exchange, the global benchmark, rose $1.77, or 4%, to $45.80 a barrel.

The U.S. Energy Information Administration early Wednesday reported a 2.1 million barrel climb in crude oil supplies to 538.6 million barrels for the week ended April 15. That was below the 3.1 million barrel increase reported by the American Petroleum Institute late Tuesday, but above the climb of 1.6 million barrels expected by analysts polled by Platts.

Meanwhile, total domestic oil production declined by 24,000 barrels a day to 8.953 million barrels a day in the latest week, EIA data showed. The weekly decline was the sixth one in a row.

Among the oil products, gasoline supplies fell 100,000 barrels, while distillate stockpiles declined by 3.6 million barrels last week, according to the EIA.

May natural gas fell 1.9 cents, or 0.9%, at $2.069 per million British thermal units, after settling Tuesday at the highest level since early February. 

Oil prices had posted declines early Wednesday. The Kuwaiti strike organizer Oil and Petrochemical Industries Workers Confederation said the three-day strike was “overwhelmingly successful,” according to the Kuwait News Agency.

The strike had reduced around 60% of the country’s daily production, said BMI Research.

Earlier in the week, prices rose as the market looked past the failure of a group of major oil producers to agree on an output freeze by focusing on supply outages around the world.

Apart from Kuwait, disruptions in Iraq, Nigeria and the North Sea also curtailed global output by around 750,000 barrels a day, roughly half the rate at which the total world supply is estimated to be growing.

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