Oil advances after large US inventory drawdown

Oil futures rose nearly one percent as the dollar index fell off July 14, 2017 highs, following earlier data from the US, the world's largest energy consumer, including the EIA report that showed a larger-than-expected inventory drawdown. 

As of 05:08 GMT, US crude futures due on September 15 rose 1.50% to $69.55 a barrel from the opening of $68.52, while Brent futures due on September 15 climbed 0.86% to $74.07 a barrel from the opening of $73.44, as the dollar index slipped 0.07% to 94.55 from the opening of 94.61. 

Earlier US data showed new home sales fell 5.3% in June to an annualized 631 thousand units, compared to a 3.9% increase in May to 666 thousand, while analysts expected a 3.1% drop to 668 thousand units. 

Large Drawdown 

The Energy Information Administration released its report on US crude stocks, showing a drawdown of 6.1 million barrels in the week ending July 20, compared to a surplus of 5.8 million in the previous reading, while analysts expected a 2.6M drop, with total stocks now down to 404.9 million barrels, which is 3% below the five-year average.  

Gasoline stocks fell 2.3 million barrels, still 4% above five-year averages, while distillate stocks, including heating fuel, shed 0.1 million barrels, making them 13% below averages.

Otherwise, Russian oil minister Alexander Novak said today that Russia's production outlook was raised for 2018 and 2019, expecting total output to reach 551 million tonnes in 2018, and 555 million in 2019 to counter recent global shortages.

US Oil Rig Count 

Baker Hughes, a US oil services company, reported a drop of 5 rigs in the oil rig count to a total of 858 rigs last week.

US output is up to 11 million bpd for the first time ever, nearing Russia's 11.1 million bpd, and passing Saudi Arabia's 10.7 million bpd.