Oil prices climb on U.S. gasoline drawdown, snap week-long fall

By Meeyoung Cho
SEOUL, Oct 16 (Reuters) - Crude oil futures rose on Friday
to snap a week-long fall, as U.S. gasoline and distillate
inventories dropped more than expected.
Global benchmark Brent crude has lost 4.5 percent so far
this week, and has plunged more than a quarter since May this
year.
Brent's new front-month December contract LCOc1 had gained
44 cents, or 0.88 percent, to $50.17 a barrel by 0206 GMT, after
ending up 4 cents at $49.73 a barrel. Brent's November contract
finished down 44 cents at $48.71 a barrel on Thursday before
expiring.
U.S. crude's front-month November contract CLc1 rose 55
cents, or 1.19 percent, to $46.93 a barrel. It had settled down
26 cents, or 0.6 percent, at $46.38 a barrel.
Data from the Energy Information Administration (EIA) showed
that gasoline stocks fell by 2.6 million barrels last week,
compared with analyst expectations for a 1.7-million barrel
drop. It showed that distillate stockpiles, which include diesel
and heating oil, declined by 1.5 million barrels versus
expectations for a 60,000-barrel drop.
But the EIA data also showed U.S. crude stocks surged by 7.6
million barrels to 468.56 million barrels last week, compared
with analyst expectations for an increase of 2.8 million
barrels, but less of an increase than the 9.4 million-barrel
jump reported by industry group American Petroleum Institute
(API). [API/S EIA/S]
Oil markets were also supported as Asian shares got a bright
start on Friday, catching some of Wall Street's shine after
upbeat U.S. price and jobless claims data calmed some recent
concerns about the strength of the U.S. economy. MKTS/GLOB
Yet globally growing oil surplus concerns continue to weigh
on markets.
"We expect the oil price recovery to proceed at a measured
pace, with significant oversupply continuing through (the first
half of next year) ... as it depends on the relatively slower
responses of non-OPEC supply and global consumer demand which
are now gradually becoming evident," Michael Hsueh at Deutsche
Bank said in a note.
Schlumberger Ltd SLB.N , the world's No.1 oilfield services
provider, suggested that it may have to reduce costs further and
cut more jobs as it expects any rebound in drilling activity to
now take longer than expected.
Meanwhile, investors are waiting for China's latest economic
growth data scheduled to be released on Monday. China's economic
growth is expected to fall below 7 percent for the first time
since the global financial crisis in the third quarter, putting
pressure on policymakers to roll out more support measures as
fears of a sharper slowdown spook investors.