Investing.com - West Texas Intermediate oil pared losses in North American trade on Thursday in what was an initial reaction after data that showed that oil supplies in the U.S. registered a larger-than-expected inventory draw.
Crude oil for February delivery on the New York Mercantile Exchange fell $0.19, or 0.30%, to trade at $63.78 a barrel by 11:02AM ET (16:02GMT) compared to $63.49 ahead of the report.
The U.S. Energy Information Administration said in its weekly report that crude oil inventories fell by 6.861 million barrels in the week ended January 12. Market analysts' had expected a crude-stock draw of 3.536 million barrels, while the American Petroleum Institute late Wednesday reported a supply draw of 5.121 million barrels.
Supplies at Cushing, Oklahoma, the key delivery point for Nymex crude, decreased by 4.184 million barrels last week, the EIA said. Total U.S. crude oil inventories stood at 412.7 million barrels as of last week, according to press release, which the EIA considered to be “in the middle of the average range for this time of year”.
The report also showed that gasoline inventories increased by 3.620 million barrels, compared to expectations for a build of 3.426 million barrels, while distillate stockpiles fell by 3.887 million barrels, compared to forecasts for an increase of 0.086 million.
The report came out one day later than usual due to Martin Luther King Jr. Day on Monday.
Meanwhile, Brent's premium to the WTI crude contract stood at $6.30 a barrel by 11:15AM ET (16:15GMT), compared to a gap of $5.41 by close of trade on Wednesday.
Prices have increased around 13% since early December, benefiting from production cut efforts led by the Organization of the Petroleum Exporting Countries (OPEC) and Russia. The producers agreed in December to extend current oil output cuts until the end of 2018.
The deal to cut oil output by 1.8 million barrels a day (bpd) was adopted last winter by OPEC, Russia and nine other global producers. The agreement was due to end in March 2018, having already been extended once.
Analysts and traders have recently warned that U.S. shale oil producers could ramp up production in the coming weeks as they look to take advantage of higher prices, potentially derailing an OPEC-led effort to curb excess supply.
In fact, OPEC raised its forecast for oil supply from non-member countries in 2018 on Thursday. In its monthly report, the cartel said outside producers would boost supply by 1.15 million barrels per day (bpd) this year, up from 990,000 bpd expected previously.
"Higher oil prices are bringing more supply to the market, particularly in North America and specifically tight oil," OPEC said in the report, using another term for shale.
Elsewhere on Nymex, gasoline futures for February delivery fell 0.3 cents to $1.86.64a gallon by 11:19AM ET (16:19GMT), while February heating oil dropped 0.7 cents to $2.0617 a gallon.
Natural gas futures for February delivery traded down 15.3 cents to $3.079 per million British thermal units.