Oil prices soar on falling U.S. inventories

Randall Padilla
July 29, 2017

Oil prices edged lower on Friday but were still near eight-week highs, buoyed by a decline in USA inventories and OPEC's ongoing efforts to curb production.

Oil prices had also been supported by Saudi Arabia's pledge to cap its exports earlier this week.

The price for September Futures Brent oil rose by 1,84% reaching $50,62 per barrel on the London ICE Futures Exchange.

More market watchers are getting upbeat about the market, saying falling US and European inventories along with still-robust demand from Asia means oil prices should hold up near-term.

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.

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

27 de julio de 2017, 15:44London, Jul 27 (Prensa Latina) The fall in the oil stock in the United States shot up the price of that product to its top level in nearly eight weeks. OPEC agreed to slash the output by 1.2 million barrels per day from January 1.

Oil prices also crossed their 200-day moving averages, a key resistance level, meaning it will be harder to post further gains, said Matt Smith, director of commodity research at ClipperData.

USA stockpiles continued to fall this week, and OPEC insists it will curb supplies through 2018, if necessary.

Oil prices have rebounded over the past month due to large inventory draws, falling United States rig count and strong demand data, with prices rising above Goldman's September 2017 forecast of $50 a barrel Brent, the investment bank noted.

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