The price of oil hit its highest level in three and a half years yesterday, after American figures showed that the market had tightened more than expected and Saudi Arabia signalled that it wished to see prices rise to $80 or $100 per barrel.
U.S. crude oil inventories decreased last week ending on April 13, and the refining sector fell 70,000 barrels per day less than the previous week's average, the U.S. Energy Information Administration (EIA) said in a report on Wednesday.
Yields on US two-year Treasuries stood at levels last visited in 2008 at 2.43 per cent and 10-year German yields went above 0.57 per cent for the first time in nearly a month.
The EIA reported US crude stockpiles dropped 1.07 million barrels last week, while supplies at the Cushing, Oklahoma, pipeline hub dropped by 1.12 million. As a result Brent crude oil futures at the London exchange have reached $74.44 per barrel.
Oil prices saw a boost after President Trump fired missiles at Syria last week in response to a suspected chemical weapons attack by the Syrian regime, while the continuing economic crisis in Venezuela also added to supply concerns. U.S. WTI crude futures were up 33 cents, or 0.5 percent, at $66.85 a barrel. Oil stocks in developed economies in February stood a mere 43 million barrels above the latest five-year average, down from 340 million barrels above in January 2017. A committee that monitors adherence to the cuts meets in Saudi Arabia on Friday, and the wider group will gather in June to determine whether the agreement should be adjusted.
Oil futures finished with a loss on Thursday, pulling back from their highest levels in almost 3 1/2 years, as traders weighed comments from major oil producers ahead of a meeting in Saudi Arabia. June Brent crude finished the session at $73.80, up $2.22 or +3.10%.
We continue to see extremely strong compliance by OPEC nations to self-imposed supply limits, said Nick Holmes, an analyst at Tortoise in Leawood, Kansas, which manages $16 billion in energy-related assets.
Mid-week, the EIA and the American Petroleum Institute (API) reported a draw of about 1 million barrels of USA oil supplies.
Instability at the Middle East, Israeli-Iran and Saudi-Iran tensions, as well as US-Iran tensions may drive oil prices even higher. The contract was last up $1.63, or 2.5 percent, at $68.15.