Oil prices edged lower Thursday despite a drop in U.S. oil supplies, as a major British pipeline planned to restart sooner than expected.
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U.S. crude futures recently traded down 12 cents, or 0.2%, to $59.52 a barrel on the New York Mercantile Exchange. Brent, the global benchmark, fell 11 cents, or 0.17%, to $66.33 a barrel on ICE Futures Europe.
U.S. crude stockpiles fell for a sixth straight week as refiners continued to process ever increasing amounts of oil into fuel. Oil inventories dropped by 4.6 million barrels, ahead of the 3.7 million decline that analysts surveyed by The Wall Street Journal had anticipated.
Oil production in the U.S. also fell, sliding by 35,000 barrels a day from its highest level -- the first weekly drop since October.
"If you look at this in a void, this is a bullish report that nobody is really reacting to," said Bob Yawger, director of the futures division at Mizuho Securities USA Inc.
The impending return of a major U.K. pipeline system has taken center stage in the oil market Thursday. Pipeline disruptions have helped lift oil prices to their highest levels in 2 1/2 years in recent weeks. "That's a battle that a bullish EIA report can't win today," Mr. Yawger said.
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Brent prices jumped earlier this month after the Forties Pipeline System had to be shut to fix a hairline fracture. Repairs on the pipeline, which carries nearly 450,000 barrels of oil a day in the North Sea, have been progressing more rapidly than expected.
Pipeline operator Ineos said Thursday that "restrictions on the flow of oil and gas from platforms feeding into he pipeline have been fully lifted" and said it expects the pipeline to return to full rates "around new year." Previously, the company had said the pipeline would be back to normal early in 2018.
Crude futures were buoyed earlier in the week by an explosion on a pipeline that feeds Libya's largest oil port. The explosion was caused by sabotage but it is unclear who was behind it, according to two Libyan oil officials.
But the effect of the incident has been somewhat more muted than initially anticipated. Some 70,000 barrels of crude production a day is shut in, compared with early estimates that up to 100,000 barrels a day could be affected, and the pipeline is likely to be repaired within six days, the officials said. Until then, some loadings have continued, albeit at a slower rate.
The EIA reported that gasoline stockpiles rose by 600,000 barrels -- in line with expectations, while diesel stockpiles rose 1.1 million barrels. Gasoline futures fell 0.25%, to $1.7870 a gallon. Diesel futures rose 0.29%, to $2.0462 a gallon.
--Benoit Faucon contributed to this article.
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(END) Dow Jones Newswires
December 28, 2017 12:10 ET (17:10 GMT)