Oil rallies after record 10th straight fall in United States inventories

Philadelphia Energy Solutions oil refinery owned by The Carlyle Group in Philadelphia. US crude inventories continue declining. David M Parrott  Reuters

And OPEC is predicting rising global oil demand over the next four years will push prices even higher.

Brent crude futures LCOc1 were at $69.07 a barrel, down from a high of $69.37 earlier in the day and 18 cents below their last close.

West Texas Intermediate crude oil climbed above the $65 mark for the first time in more than three years on Wednesday.

The market also looked past EIA data showing US oil production rose to 9.88 MMBPD during the week ended January 19, drawing ever closer to the all-time high just above 10 MMBPD set in November 1970.

The Energy Information Administration (EIA) yesterday said United States inventories had fallen to 411.6m barrels, the lowest since February 2015.

That was below analyst estimates for a drop of 1.6 million barrels in an economists' poll, but the report eased traders' worries after industry data released on Tuesday suggested that stocks rose by 4.8 million barrels. A weaker dollar makes greenback-denominated commodities less expensive for investors using other currencies.

Over the past four weeks, motor gasoline product supplied averaged about 8.7 million barrels per day, up by 5.4 percent from the same period previous year.

Also supporting oil prices was a 0.7 per cent drop in the USA dollar after Treasury Secretary Steven Mnuchin's comments that a weaker currency was positive for American trade.

The report contained some bearish news on refined fuel stockpiles and US production, Kilduff said.

World oil prices have renewed their highs since December 2014 amid the publication of data from the U.S. Energy Department on reducing raw material reserves in the country, the OPEC + agreement and the weakening of the dollar.

Total products supplied over the past four-week period averaged 20.5 million barrels per day, up by 8.1 percent from the same period of a year ago.

EIA forecast earlier this month US production would reach 10.3 MMBPD later this year, topping Saudi production and rivaling Russian Federation.

In May, the parties to the agreement agreed to extend the deal until the end of March 2018. It is thought to have supported the recent oil price rally and helped to clear a global supply overhang.

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