Given U.S. president Donald Trump's repeated blasting this summer of the Organization of the Petroleum Exporting Countries (OPEC) causing high oil prices, it was inevitable that he would resume focus following this week's disclosure that member Saudi Arabia could live with prices over $80 per barrel.
Analysts argued that the continued drawdowns in oil stockpiles, even though we are past the summer driving season, are a result of increased USA crude oil exports, which have been supported by the widening differential between USA benchmark WTI prices and the global benchmark, Brent crude.
The US counts Saudi Arabia, OPEC's de facto leader, as a key ally and will be keen not to see a price surge ahead of the US midterm elections November 6, with Trump's Republican Party at risk of losing control of Congress.
OPEC and its allies are unlikely to agree to an official increase in crude output when they meet in Algeria this weekend, although pressure is mounting on top producers to prevent a spike in oil prices above $80 a barrel ahead of new US sanctions on Iran, OPEC sources told Reuters on Thursday.
West Texas Intermediate (WTI) for October delivery price settled 1.8 percent higher with the support of high US crude oil exports information released by EIA.
USA crude was on track to end the week up 2.5 percent and Brent to post a 0.9 percent gain. US light crude oil was 40 cents higher at $71.52 after rising almost 2 percent on Wednesday. As per EIA prediction, on an average, the United State's crude oil production rate for 2018 until now has been increased.
USA light crude was up 46 cents at $70.77, after earlier touching a high of $71.80.
Distillate stockpiles, which include diesel and heating oil, rose 839,000 barrels, versus expectations for a 651,000-barrel increase, the EIA data showed. Brent is close to four-year highs, trading just below $80 a barrel, as investors bet that Opec will be unable to compensate fully for the loss of oil from Iran, Opec's third-biggest producer.
In fact, just last week Trump's own Energy Department announced that the United States surpassed Russian Federation and OPEC leader Saudi Arabia in oil production.
Crude inventories fell 2.1 million barrels to 394.1 million barrels, the lowest since February 2015, EIA data showed. Helped by hydraulic fracturing and horizontal drilling, production began increasing before a large drop in prices in mid-2014 forced producers to scale back.
The U.S. Energy Information Administration (EIA) reported significant draws in U.S. crude oil and gasoline inventories during last week, and both major benchmarks of crude oil increased on Wednesday.
America has risen to the top the list of oil-producing countries for the first time in more than four decades, analysts believe.