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Oil extends rise after surprise U.S. crude stock draw

Published 22/09/2016, 10:57 am
© Reuters.  Oil extends rise after surprise U.S. crude stock draw
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* Weaker dollar, Norwegian oil strike also support crude

* But Goldman says to prepare for rangebound oil prices

By Henning Gloystein

SINGAPORE, Sept 22 (Reuters) - Oil prices extended gains from the previous session in Asian trading on Thursday after a surprise third consecutive weekly U.S. crude inventory draw tightened the market.

U.S. West Texas Intermediate (WTI) crude oil futures CLc1 were trading at $45.59 per barrel at 0045 GMT, up 25 cents from their previous close. The contract had already gained as much as 3 percent the day before.

Prices jumped after the U.S. Energy Information Administration (EIA) surprised the market with a 6.2 million barrel fall in crude oil inventories last week to 504.6 million barrels. Forecasters in a Reuters poll had expected a 3.4 million-barrel build. EIA/S

"Oil prices rose after EIA data showed U.S. crude inventories declined to the lowest level since February," ANZ bank said in a note on Thursday.

International benchmark Brent crude futures LCOc1 were also up, gaining 27 cents from their last close to $47.10 per barrel.

Brent was lifted by an oil workers' strike in Norway, which threatened to cut North Sea crude output. weaker dollar .DXY after the Federal Reserve left U.S. interest rates unchanged also supported oil prices as it makes dollar-traded fuel imports cheaper for countries using other currencies. recent gains, analysts said that oil prices would likely remain range-bound at relatively low levels, putting pressure on oil producers.

"In a world of continued (U.S.) shale productivity gains that cause other oil producing regions around the world to become highly focused on cost competitiveness, we believe investors and companies should prepare for an environment of rangebound oil prices," Goldman Sachs (NYSE:GS) said in a note to investors published late on Wednesday.

In a clear illustration of the impact on the ground of the oil industry's cost cutting and reduced exploration activity, the waters around Singapore have become the dumping ground for hundreds of drilling and offshore oil support vessels that have become surplus to requirement in the current era of cheap oil. MAP of idled oil equipment off Batam, Indonesia

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