Crude oil prices edge higher after industry data show declines in U.S. crude oil inventories. File photo by Monika Graff/UPI |
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Feb. 23 (UPI) -- Crude oil prices moved into positive territory early Thursday after U.S. powerhouse Exxon Mobil cut its reserve estimate and supply-side pressures waned.
Crude oil prices have oscillated between sharp gains and losses this week as traders try to gauge on what side of the supply and demand spectrum the market is situated. Prices soared early in the week after the head of the Organization of Petroleum Exporting Countries said support for efforts to balance the market were strong, but that sentiment was offset later by signs of strong recovery in U.S. shale oil.
Crude oil prices were moving higher early Thursday after data from the American Petroleum Institute showed U.S. crude oil inventories declined by 884,000 barrels. That eased short-term supply issues and followed a statement from Exxon that it removed about 3 billion barrels of oil equivalent from its proved reserves.
The price for Brent crude oil, the global benchmark, was up 2 percent to trade at $56.96 per barrel about a half hour before the start of trading in New York. West Texas Intermediate, the U.S. benchmark, was up 2 percent to $54.68 per barrel.
Prices will be influenced later in the morning when the Energy Information Administration releases official data. If EIA confirms the industry's report of a draw, oil prices are primed for further gains.
Broader markets may be balancing against crude oil in reaction to signs from the U.S. Federal Reserve that it may increase its key lending rate soon. A rate increase would increase the value of the U.S. dollar and decrease the price for commodities like crude oil that trade in that currency.
Speaking in New York, Fed Gov. Jerome Powell said most signs point to a U.S. economy that's ahead of the curve.
"I see it as appropriate to gradually tighten policy as long as the economy continues to behave roughly as expected," he said Wednesday. "As always, the actual path could be faster or slower than expected and will depend on developments in the economy."
Elsewhere, rig company Transocean reported strong earnings for the fourth quarter in a sign that investors were targeting oil and gas exploration offshore. Revenues for the fourth quarter were $974 million, a gain of 7.5 percent from the third quarter.
