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Crude oil prices continued to rise and remained close to a two-month high, after economic data showed a rising demand for crude oil imports in China, as well as increased US refining activity that attracted more crude oil.
The US Department of Energy reported that crude inventories fell 4.6 million barrels last week, with inventories excluding the country’s strategic reserve falling by more than 11% last year. Refining operations in the United States increased, leading to the capacity use of 95.7%, the highest level since 1998. Refineries have benefited in recent months from the expansion of US crude oil and Brent futures prices.
Continued strong demand for refined products is pushing refineries to consume crude oil at increasing rates. US crude futures rose 20 cents, reaching $84.59 a barrel, while Brent crude futures settled at $66.72 a barrel. WTI crude breached $60 a barrel for the first time since June 2015.
The oil markets witnessed these gains after a year of production cuts led by OPEC and Russia, which began in January and is due to continue until 2018. In light of these cuts, US oil production has risen more than 16% since mid-2016 and approached 10 million barrels per day. In the last week, US production fell slightly to 9.75 million bpd.
China’s economic data showed that oil prices were boosted by early trade through China’s strong import quotas for 2018. The new data showed that China’s crude oil inventories reached 26.15 million tons in November. Oil prices were also backed by pipeline cuts in Libya and the North Sea. Libya’s oil supplies were disrupted by a pipeline attack this week and its flow to the Sider port fell by about 70,000 bpd on Thursday.
In the North Sea, 450,000 bpd capacity pipeline was shut down this month, after a crack was found on the ground side. The pipeline is expected to return in early January.
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