Oil prices jump 4.5% on US crude stocks draw

Oil Dips: Looks To Reignite Rally on OPEC, Storm Barry and Iran Tensions

Oil extended gains after closing at a seven-week high as around a third of the Gulf of Mexico's crude output was cut before a potential hurricane and USA crude inventories shrunk more than expected. During the Thursday session, they hit their highest price since May 30, at $67.65/Bbl, Kallanish Energy reports. A fourth weekly draw in American stockpiles and Federal Reserve Chairman Jerome Powell's signal the central bank is preparing to cut interest rates added to the bullishness.

Tensions have been high in the Middle East after attacks on tankers and the downing of a US drone by Iran last month, following President Donald Trump's unilateral withdrawal from a multi-party agreement with Tehran to end its nuclear programme.

United States output is rising again after a brief drop from record levels, according to the EIA. Asian stocks climbed and the dollar weakened following Powell's comments. "The overall situation points to further rising oil prices in the short term", a report by Commerzbank AG said. That was the fourth straight weekly decline in USA crude inventories.

U.S. West Texas Intermediate crude oil futures dipped 23 cents, or 0.4%, to settle at $60.20/Bbl, after hitting their highest price since May 23, at $60.94/Bbl. The contract closed at the highest level since May 22 on Wednesday. The global benchmark crude traded at a US$6.58 premium to WTI for the same month.

Major oil firms began evacuating and shutting in production in the Gulf of Mexico after weather forecasts warned that a tropical disturbance might become a storm on Wednesday or Thursday. Chevron mentioned Tuesday it started closing five of its platforms and can also composed initiate spicy out all connected personnel. Royal Dutch Shell Plc and BP have also evacuated workers. US crude stocks fell 9.5 million barrels in the week to July 5, the Energy Information Administration (EIA) said, more than the 3.1 million-barrel draw analysts had expected as refineries ramped up output.

In June the members of the organization extracted 29.83 million barrels per day, but the document estimates that by 2020 it will only have to supply 29.27 million.

Five boats believed to belong to Iranian Revolutionary Guards approached a British oil tanker on Wednesday and asked it to stop in Iranian waters close by, but withdrew after a British warship warned them over radio, a US defence official said on Thursday. That came after Iran's military vowed to retaliate against the U.K.'s seizure of a tanker loaded with Iran's crude off the coast of Gibraltar last week.

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