CALGARY, Alberta: U.S. crude hit a two-year high in thin trade on Thursday as the shutdown of a major crude pipeline from Canada and a draw on fuel inventories pointed to a tightening market, despite rising output from U.S. producers.
West Texas Intermediate crude was up 54 cents at $58.56 per barrel by 2:00 p.m. EST (1900 GMT), close to a two-year peak of $58.58 touched earlier in the session.
Brent crude settled at $63.55 per barrel, 23 cents above its previous close.
Trading volumes were thin because of the Thanksgiving holiday in the United States.
The shutdown on TransCanada Corp's
"Inventories should drain sharply in the next few weeks given the uncertain timeline for a restart of the Keystone pipeline, a major artery for Canadian heavy oil barrels into the heart of the Cushing hub," said Martin King, a GMP FirstEnergy analyst in Calgary.
Prices also found support from a drawdown in commercial fuel inventories in the United States.
U.S. stocks
The market shrugged off data showing U.S. output
Climbing U.S. output threatens efforts by the Organization of the Petroleum Exporting Countries, Russia and some other non-OPEC producers to reduce global supplies by limiting their production.
"Whatever OPEC will be discussing and ... agreeing upon can be made redundant by the actions of U.S. suppliers, which are likely to hike up production in a similar order," said Eugen Weinberg, head of commodities research at Commerzbank.
He said another rise of 800,000 to 1 million bpd in U.S. output in 2018 would mean "attempts by OPEC to tighten the market may not be successful."
OPEC meets on Nov. 30 to discuss policy, with Saudi Arabia lobbying for extending cuts that are due to expire in March. - Reuters
Already a subscriber? Log in.
Subscribe now and receive FREE sooka plan for 1 month.
Cancel anytime. No ads. Auto-renewal. Unlimited access to the web and app. Personalised features. Members rewards.
Follow us on our official WhatsApp channel for breaking news alerts and key updates!