Crude Futures Shrug Off Rise In OPEC Output To Settle Higher
Crude futures settled higher on Thursday, as data showing an uptick in global demand for oil offset a report showing OPEC compliance with production cuts fell to its lowest level in six months.
On the New York Mercantile Exchange, crude futures for July delivery rose 59 cents to settle at $46.08 a barrel, while on London's Intercontinental Exchange, Brent added 63 cents to trade at $48.37 a barrel.
Oil prices continued to advance on Thursday, despite a report from the International Energy Agency showing supply of oil rose by 720,000 barrels a day (bpd) in June, nearly half – 340,000 barrels per day – of the uptick in supply came from OPEC countries.
Saudi Arabia has increased its flows, the IEA said, as well as Libya and Nigeria who are not part of the production freeze.
"Higher output from members bound by the production pact knocked compliance to 78 percent in June, the lowest rate during the first six months of the agreement," the IEA said in the report.
In May, OPEC and non-OPEC members agreed to extend production cuts of 1.8m bpd for a period of nine months until March, but allowed Nigeria and Libya to remain exempt from the cuts.
The bearish data failed to derail upward momentum in oil prices, as investors cheered data pointing to an increase in demand for oil from China as imports increased 13.8% to 8.55m bpd during the first six months of the year, compared to the same period a year ago.
Also adding to positive sentiment on oil, was a weekly update from Energy Information Administration (EIA) on Wednesday, revealing a drop in both crude and gasoline stockpiles.
Inventories of U.S. crude fell by roughly 7.6m barrels in the week ended July 7, confounding expectations of draw of about only 2.9m barrels while gasoline inventories unexpectedly fell by roughly 1.65m.
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