NYMEX crude trades in a narrow range near $58 per barrel after a 0.9% gain yesterday. Crude rose yesterday as EIA weekly report noted a bigger than expected decline in US crude oil stocks.
EIA noted a 6.495 million barrels decline in US crude oil stocks as against forecast of 3.5 mn bbl decline. Stocks fell as higher refinery and export demand offset growth in imports and production. US crude production rose marginally to a fresh record high level of 9.789 million barrels per day. Imports rose 6.4% to 7.834 million bpd. On other hand, refinery utilization rate rose from 93.4% to 94.1%. Exports surged 71% to 1.858 million bpd.
EIA weekly report also noted a smaller than expected 1.237 mn bbl increase in gasoline stocks on higher demand and decline in production. Distillate stocks noted an unexpected 0.769 mn bbl rise due to higher imports.
Crude also benefitted from supply concerns due to closure of Forties pipeline in North Sea since Dec.11 Also supporting price are comments from Kuwait Oil Minister said that OPEC and non-OPEC compliance with global output cuts reached 122% in November. Saudi has also indicated that it is premature to think that OPEC will stop production cuts.
Crude also gained support from weaker US dollar. The US dollar weakened on narrowing yield gap between US and European bond and uncertainty about Fed's monetary policy.
However, weighing on crude is weakness in equity market. US equity market fell for the second consecutive day as market players assessed US tax reforms.