Crude oil prices edged higher Wednesday, after U.S. data showed that stockpiles of oil and fuel continued to drop and oil production fell for the first time since February.
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U.S. crude futures rose 61 cents, or 1.25%, to $49.27 a barrel on the New York Mercantile Exchange. Brent, the global benchmark, rose 77 cents, or 1.49%, to $52.42 a barrel on ICE Futures Europe.
U.S. oil stocks fell by 1.75 million barrels last week -- the sixth consecutive weekly decline -- as refiners ramped up their purchases of crude, according to the U.S. Energy Information Administration.
The decline fell short of the 2.2-million-barrel decline forecast by analysts and traders surveyed by The Wall Street Journal, but was a more bullish figure than the 882,000-barrel-increase reported Tuesday by the American Petroleum Institute.
Stockpiles of gasoline and diesel fuel also fell last week, and the relentless rise in U.S. oil production paused for the first time in 13 weeks, as falling production in Alaska offset increases in the continental U.S. In total, U.S. production pulled back by 9,000 barrels a day.
"If you're the Saudis, they're going to be happy to see this. That's about as good as they could have hoped for," said Bob Yawger, director of the futures division of Mizuho Securities USA.
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Resurgent U.S. production has been a fly in the ointment for Organization of the Petroleum Exporting Countries and other major producers as they have sought to reduce the global overhang of oil. Investors are pulled between news that OPEC and non-cartel producers are poised to cut more of their production and expectations of accelerating oil output from the U.S. and other countries.
Saudi Arabia and Russia said earlier this week that they would support extending the agreement for nine months, but some analysts and investors have said that may not be enough. Even Wednesday's figures showing falling stockpiles will do little to change that, said Gene McGillian, research manager at Tradition Energy.
"Inventories remain stubbornly high," Mr. McGillian said. Crude prices neared overnight highs after the figures were released but failed to break above that. "I think that shows there's bit of reservation in the market about the deal," Mr. McGillian said.
Doubts resurfaced Tuesday after the International Energy Agency said commercial oil inventories in developed nations grew by 24.1 million barrels in the first quarter. The agency's preliminary findings suggested stocks increased further in April.
Even if OPEC extends its cuts, "stocks at the end of 2017 might not have fallen to the five-year average, suggesting that much work remains to be done in the second half of 2017 to drain them further," the IEA said.
Gasoline futures rose 0.88 cent, or 0.55%, to $1.6131 a gallon. Diesel futures rose 2.86 cents, or 1.89% to $1.5450 a gallon.
Jenny W. Hsu contributed to this article.
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(END) Dow Jones Newswires
May 17, 2017 12:29 ET (16:29 GMT)