Dec. 20 (UPI) -- Expectations that crude oil inventories in the United States, the world's leading economy, continued to drop and sent oil prices higher in Wednesday trading.
Traders are watching the level of supply and demand closely for signs that the glut on the market that pushed oil prices below $30 per barrel last year is evaporating.
A survey Monday of analyst sentiment from commodity price group S&P Global Platts said crude oil stocks in the United States dropped by 3.75 million barrels last week. That's in stark contrast to the five-year average of a 2.2 million barrel build for this time of year.
Geoffrey Craig, the oil futures editor at Platts, said in an emailed report that, if the survey is accurate, crude oil stockpiles are about 12 percent above the five-year average and about half as oversupplied as September. That comes even as U.S. crude oil production is on pace to hit 10 million barrels per day next year.
"U.S. crude exports averaged 1.086 million barrels per day the week prior," Craig said. "Exports have averaged 1.5 million barrels per day since the week ending September 22, which was nearly twice as much as the year-to-date level prior to that."
The price for Brent crude oil, the global benchmark, was up 0.5 percent as of 9:20 a.m. EST to $64.12 per barrel. West Texas Intermediate, the U.S. benchmark for the price of oil, was up 0.49 percent to $57.84 per barrel.
Official U.S. data on crude oil inventories is published by the U.S. Energy Information Administration midway through the trading morning. A major deviance from the Platts survey would influence the direction for crude oil prices for the rest of the day.
The discount for WTI relative to Brent has made U.S. oil more competitive in its second year on the open market. That difference, or spread, has narrowed since mid-December when pipeline operator Ineos closed down the Forties pipeline system, which sends about 40 percent of the oil production in the British North Sea to inland refineries.
Ineos said Tuesday that repairs to the system were underway, the custom parts necessary to facilitate a restart have been fabricated and they should be at the site where a crack was discovered in the next few days. It could be two to four weeks from December 11 before the system is back up and running, however.
Markets in general should be net positive on the day after a major U.S. tax overhaul moved closer to President Donald Trump's desk. Passed with no support from the minority Democrats, the bill would offer permanent tax cuts to corporations in a win for Wall Street.