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US Crude Heads for $65 As EIA Reports 10th Weekly Decline in Supplies

January 24, 2018 at 17:43 by Andrew Moran

Oil prices are mixed midweek as US crude is looking to top $65 while Brent crude is trying to build some momentum. A new US government report, which showed a 10th weekly drop in stockpiles, helped US crude hover around its best levels in more than three years.

February West Texas Intermediate (WTI) crude futures advanced $0.37, or 0.57%, to $64.84 per barrel at 16:28 GMT on Wednesday on the New York Mercantile Exchange. US crude prices are trading at their highest levels since December 2014.

Brent, the international benchmark for oil prices, is unable to break above $70. March Brent crude futures tumbled $0.06, or 0.09%, to $69.90 a barrel on London’s ICE Futures exchange.

According to the US Energy Information Administration (EIA), US crude supplies fell by 1.1 million barrels for the week ending January 19, while domestic oil production rose 128,000 barrels per day (bpd) to 9.878 million bpd. Gasoline stockpiles climbed by 3.1 million barrels, while distillate stockpiles jumped 600,000 barrels.

Elsewhere in the oil markets, investors are keeping a close eye on the situation in Nigeria. A militant group stationed in the Niger Delta has been threatening for the last week to renew a bombing campaign on crude facilities in the region. This is causing some concerns among traders about output levels.

Meanwhile, natural gas prices are surging more than 2%. February natural gas futures soared $0.07, or 2.29%, to $3.523 per million British thermal units (btu), which is the highest settlement since December 2016. February gasoline futures dipped $0.018, or 0.95%, to $1.89 per gallon, while February heating oil futures were relatively flat at $2.08 a gallon.

The blast of winter weather has impacted the US east coast with frigid temperatures boosting demand for natural gas and heating oil. The trend has reduced natural gas storage inventories, bringing them to their lowest levels in about five years.

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