Oil rises after U.S. crude supplies fall for 9th week

A worker waits to connect a drill bit on Endeavor Energy Resources's Big Dog Drilling Rig 22 in the Permian basin outside of Midland, Texas, on Dec. 12, 2014. (MUST CREDIT: Bloomberg photo by Brittany Sowacke)
(Bloomberg photo by Brittany Sowacke)

Oil rose after a government report showed that U.S. crude stockpiles fell a ninth week, marking the longest stretch of declines on record.

Crude inventories fell 2.34 million barrels last week, according to the Energy Information Administration. Supplies remain at the highest seasonal level in at least a decade. Refineries bolstered operating rates to the highest level this year. Prior to the report, prices fell to the lowest level in more than two months as the Bloomberg Dollar Spot Index climbed to a seven-week high.

“We are continuing to see crude being made into products,” said Chip Hodge, who oversees a $12 billion natural-resource bond portfolio as senior managing director at John Hancock in Boston. “We have to slog through a great deal of excess supply before the market returns to balance.”

Oil has dropped about 13 percent since touching a 10-month high of $51.67 a barrel on June 9 as Canadian supply returned after wildfires and the Brexit vote raised concerns about European economic strength. Falling U.S. crude production and inventories have offered support for the market, which saw prices hit a 12-year low in February.

WTI for August delivery, which expires Wednesday, rose 20 cents to $44.85 a barrel at 10:49 a.m. on the New York Mercantile Exchange. Prices earlier touched $43.69, the lowest intraday since May 10. The more-active September contract climbed 19 cents to $45.64.

Brent for September settlement rose 31 cents, or 0.7 percent, to $46.97 on ICE Futures Europe. The global benchmark traded at a $1.33 premium to WTI for September delivery.

The EIA report showed U.S. crude supplies dropped a ninth week, which is the longest stretch of declines in the data series that the agency began gathering in 1982.

Gasoline supplies rose 911,000 barrels to 241 million last week, marking the highest level since April, the report showed.