Daily Times

NEW YORK: Oil prices were up more than 1 percent on Wednesday, with market bulls targeting $50 a barrel and beyond, on expectations the US government will report a large crude stockpiles drawdown for last week.

The American Petroleum Institute (API), a trade group, said on Tuesday that US crude inventories fell by 5.1 million barrels in the week to May 20, twice what analysts expected in a Reuters poll.

The US Energy Information Administration will issue official stockpiles data at 10:30 a.m. EDT (1430 GMT).

Wildfires in Canada’s oil sands region, as well as a near economic meltdown in OPEC member Venezuela and a spate of violent attacks against the Libya and Nigerian energy industries have cut nearly 4 million barrels per day in global crude flows, Reuters data on supply outages show.

The shortfall has accelerated the recovery in oil prices, which are up nearly 90 percent from winter lows of around $27 for Brent crude and about $26 for the US West Texas Intermediate (WTI). “We look for new highs .. in carrying this advance higher to around the $52-52.50 area before this spring advance fully plays out,” said Jim Ritterbusch of Chicago-based oil markets consultancy Ritterbusch & Co.

Brent was up 76 cents, or 1.6 percent, at $49.37 a barrel by 9:40 a.m. EDT (1328 GMT). The session high was $49.39.

WTI rose 60 cents, or 1.3 percent, to $49.22, peaking at $49.45. Oil traded above $100 a barrel in mid-2014 before crashing on a global supply glut.

“We are definitely moving out of this surplus situation that we’ve been living in since mid-2014,” Bjarne Schieldrop, head commodities strategist at SEB Merchant Banking in Geneva, said. “There will still be some time, maybe six months of surplus, but then we’re basically into rebalancing.”