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Oil prices rise on falling US crude stocks, Saudi supply cut to Asia

Published 11/05/2017, 10:48 am
Updated 11/05/2017, 10:50 am
© Reuters.  Oil prices rise on falling US crude stocks, Saudi supply cut to Asia
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* Saudi Arabia cuts oil supplies to Asia for June

* U.S. crude stocks fall 5.2 million barrels to lowest since Feb.

By Henning Gloystein

SINGAPORE, May 11 (Reuters) - Oil prices rose on Thursday, and Brent was firmly back over $50 per barrel, as a fall in U.S. crude inventories and a more severe than expected cut in Saudi supplies to Asia tightened the market.

Brent crude futures LCOc1 , the international benchmark for oil prices, were at $50.33 per barrel at 0039 GMT on Thursday, up 11 cents, or 0.2 percent, from their last close.

U.S. West Texas Intermediate (WTI) crude oil futures CLc1 were trading at $47.46 per barrel, up 13 cents, or 0.3 percent from the last settlement.

"We saw the biggest draw in inventories for the year last week with stockpiles down more than 5 million barrels. And it looks like OPEC's production cut is finally biting," said Greg McKenna, chief market strategist at CFD and FX provider AxiTrader.

The Organization of the Petroleum Exporting Countries (OPEC) and other producers including Russia have pledged to cut output by almost 1.8 million barrels per day (bpd) during the first half of the year.

So far, however, there have been few signs that global markets are actually tightening as producers shielded their biggest customers, especially in Asia, from the cuts.

But after Brent prices fell back below $50 per barrel last week, analysts said producers felt forced to act.

Saudi Arabia, the world's biggest oil exporter, has notified several Asian refiners of its first cuts in crude allocations for regional buyers since OPEC's output reduction took effect in January. reported on Tuesday that state-owned Saudi Aramco will reduce oil supplies to Asian customers by about 7 million barrels in June. the United States, U.S. crude stockpiles posted their biggest one-week drawdown since December last week as imports dropped sharply, while inventories of refined products also fell.

Crude inventories USOILC=ECI fell 5.2 million barrels in the week to May 5, the U.S. Energy Information Administration said. At 522.5 million barrels, crude stocks were the lowest since February.

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