SINGAPORE: Oil prices eased on Thursday, with US crude falling away from two-year highs reached the day before, but the shutdown of the Keystone pipeline and a drawdown in fuel inventories continued to bolster markets despite worries over rising output.
US West Texas Intermediate (WTI) crude futures were at $57.89 a barrel at 07:49 GMT, down 13 cents, or 0.2 per cent, from their last settlement, but still close to 2015-highs of $58.15 a barrel reached on Wednesday.
Brent crude futures LCOc1 were at $63.14 per barrel, 18 cents, or 0.3 per cent, below their last close.
WTI has been buoyed by the shutdown of the 590,000 barrel-per-day (bpd) Keystone pipeline, one of the largest crude pipelines from Canada to the United States, as well as by another drawdown in commercial fuel inventories that came despite record US oil production.
“Lower supplies into the US from the north and robust exports from the south are likely to support a further reduction in US inventories,” said Ole Hansen, head of commodity strategy at Saxo Bank.
US crude inventories C-STK-T-EIA fell 1.9 million barrels in the week to November 17, to 457.14 million barrels.
Stocks have dropped by 15 per cent from their records in March, to below 2016 levels. The inventory drop came as the Keystone pipeline connecting Canada’s oilfields to the United States was shut last week after an oil spill in South Dakota.
Operator TransCanada is cutting deliveries at least until the end of November. In a sign of a tightening market, the WTI forward curve has moved from contango, when prices for future delivery are more expensive than those for immediate dispatch, into backwardation, where spot prices are higher than those for later delivery. — Reuters
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