Oil prices climb on reported US crude stock draw, firm Japan imports

Oil prices climbed Wednesday, backed by a reported draw in U.S. crude inventories and by firm import data from Japan.

U.S. West Texas Intermediate (WTI) crude futures were up 1.8 percent, or 77 cents, at $44.82 a barrel at 0251 GMT. The October contract expired yesterday at $43.44 a barrel and the front-month has now rolled over to November delivery.

Traders said that the main WTI price driver had been American Petroleum Institute data showing a 7.5 million barrel draw to 507.2 million barrels in U.S. crude inventories, the third weekly stock draw.

Market participants had expected an increase of 3.4 million barrels, according to a Reuters poll.

International benchmark Brent crude oil futures were trading at $46.45 per barrel, up 57 cents, or 1.2 percent, from their last close.

Traders said that Brent was being supported by firm import data from Japan.

Japan’s customs-cleared crude oil imports rose 0.5 percent in August from the same month a year earlier, the Ministry of Finance said on Wednesday.

Japan, the world’s fourth-biggest crude buyer, imported 3.38 million barrels per day of crude oil last month, the preliminary data showed.

Overall, however, oil markets remain oversupplied as exporters around the world pump near record amounts, while demand stutters.

“Fundamentals suggest the oil market is likely to remain in surplus for longer than many expected,” Dutch bank ING said, citing lower Chinese oil purchases and uncertainty around the global economy as factors weighing on markets.

Major oil producers from the Organization of the Petroleum Exporting Countries (OPEC) and also Russia plan to meet in Algeria next week to discuss measures to rein in the oversupply, but analysts said they did not expect significant cuts to production.

“OPEC members will not agree on a production freeze at the end of September at the meeting in Algiers. Political tensions will prevent cohesion, and individual members will continue to protect market share from resilient non-OPEC producers,” BMI Research said in a note to clients.

“Even if an agreement to freeze production is reached, this will change very little for the global oil market, given that most OPEC members are already producing close to their peak capacity,” it added.

Source: Reuters