Oil prices soar on falling USA inventories

Oil prices soar on falling USA inventories

Oil prices soar on falling USA inventories

Crude oil prices settled higher in futures market on Thursday, as support from four weeks of falling USA crude supplies contributed to a fourth-consecutive session of gains.

Royal Dutch Shell Plc extended its force majeure on exports of Nigeria's Bonny Light crude oil to cover the outage of the Trans Niger pipeline, a statement from the company said on Friday, providing further support to Brent crude.

Crude oil futures sustained recent gains Friday morning, crawling closer to USD50 a barrel for the first time since May.

But analysts say oil prices may have little room to head higher as recent gains could encourage more output, particularly from USA shale producers with low costs.

Short covering in the September contract contributed to the rally in the front-month spread, traders said.

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U.S. West Texas Intermediate (WTI) crude September futures were down $0.27%, at $48.91 per barrel.

Prices have rallied amid signs that U.S. production will slow in the second half of the year.

USA gasoline futures for delivery in August were up more than 1 percent at the highest since May 24.

The U.S. Department of Energy reported that commercial oil reserves in the country for the week ended July 21 fell by 7.2 million barrels, or 1.5 percent - to 483.4 million barrels. Gasoline stocks fell by 1 million barrels, compared with analyst expectations for a 614,000-barrel drop. This report details current and projected cargo flows - including Middle East exports to the USA - along with a host of trends, from OPEC to Venezuela to China.

Prices were up 8.6% this week, hitting a 2-month peak. Combined, the total oil and gas rig count in the U.S. now stands at 958 rigs, up 495 rigs from previous year, with oil rigs in the United States increasing by 2 and gas rigs increasing by 6 this week.

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