Oil prices edged higher Friday morning, helped by continued, if moderate, investor optimism over a drawdown in U.S. crude stockpiles.
Brent crude, the global benchmark, rose 0.1%, to $51.08 a barrel, on London's Intercontinental Exchange. On the New York Mercantile Exchange, West Texas Intermediate futures were trading up 0.3%, at $47.21 a barrel.
Continue Reading Below
Investors were responding to fresh data this week from the U.S. Energy Information Administration that showed crude inventories had been reduced by 9 million barrels last week, bringing the total drawdown since March to 69 million barrels.
"Prices should be $10 higher given where the fundamentals are," said Amrita Sen, chief oil analyst at Energy Aspects, an energy market research consultancy.
But Ms. Sen said prices were being held back by investor concern over still-rising U.S production. She said the market was overly focused on the EIA's concurrent announcement that U.S. output had increased by 79,000 barrels a day, to 9.502 million barrels a day, during the week ended Aug. 11.
"The market is so obsessed with supply. If U.S. output is going up and stocks are drawing that is an extremely bullish development," Ms. Sen added, noting rising demand.
At the same time, prices Friday were also higher a day after a fire at Royal Dutch Shell PLC's Deer Park, Texas refinery, which could be shut for at least a week of repairs. The news sent prices of refined products upwards, which in turn "helped drag the rest of the energy complex higher and crude prices duly snapped a three-day losing streak," according to analysts at oil broker PVM Associates.
The refinery outage is Shell's second in roughly three weeks. The company had to shutter its Rotterdam-based Pernis refinery--Europe's largest--following a fire at a high-voltage electricity switch station. The refinery has since moved to restart some operations.
Among refined products, Nymex reformulated gasoline blendstock--the benchmark gasoline contract--was up 0.8%, at $1.5063 a gallon. ICE gasoil changed hands at $470.25 a metric ton, up roughly 1% from the previous settlement.
Write to Christopher Alessi at email@example.com
(END) Dow Jones Newswires
August 18, 2017 06:43 ET (10:43 GMT)