Crude oil prices rose on Wednesday after news U.S. crude stocks increased less than expected last week and inventories at the oil hub at Cushing, Oklahoma, declined for the first time since November, suggesting an oil glut may be beginning to ease.
U.S. crude inventories USOILC=ECI rose 1.9 million barrels last week, compared with analysts’ expectations for an increase of 2.3 million barrels. [EIA/S] [API/S]
Crude stocks at the Cushing, Oklahoma, delivery hub USOICC=ECI fell 514,000 barrels, the government’s Energy Information Administration said. The decline at Cushing was the first since Nov. 28, according to EIA data.
“Inventories at Cushing did finally draw down due to strong refinery demand, and that is supportive, since it will allay the fears of many that the operational storage capacity could be reached,” said John Kilduff, partner at Again Capital LLC in New York.
Brent crude oil LCOc1 was up 90 cents at $65.54 a barrel by 1450 GMT. U.S. crude CLc1 was up $1.20 at $58.26.
The EIA data took attention away from Saudi Arabia, where King Salman altered the kingdom’s line of royal succession in a reshuffle that also affected leadership of the national oil company, Saudi Aramco.
King Salman bin Abdulaziz sacked his younger half-brother as crown prince and appointed his nephew, deputy crown prince Mohammed bin Nayef, as the new heir apparent.
He also made his son, Prince Mohammed bin Salman, deputy crown prince, and appointed Saudi Aramco Chief Executive Khalid al-Falih as chairman of the state oil firm and health minister.
Saudi reshuffles often move oil prices as stability in the world’s biggest oil-exporting country is key to global supplies, but Wednesday’s announcement had little obvious impact.
Mohammad Al Sabban, a former senior adviser to Oil Minister Ali al-Naimi, said he expected Saudi policy to be unchanged.
“There will be no change in oil policy at all. The policy is not subject to change at every cabinet reshuffle,” Al Sabban said.
Clement M. Henry, professor at Middle East Institute, National University of Singapore, agreed:
“I don’t think there’s been any disagreement about the idea of keeping up production, maintaining market share, refusing to be a swing producer,” Henry said.
Naimi, 79, remains in the ministerial position he has occupied for 20 years.