The price of oil was on the negative territory on Thursday after advancing for three straight sessions. However, futures are still under its 8-weeks highs on expectations that dropping U.S. crude oil stockpiles will somehow lessen supply glut in an already bloated market.
On the previous week, crude stocks in the United States immediately declined the same time when imports dropped and refineries edged higher. According to the Energy Information Administration (EIA) last Wednesday, distillate inventories and gasoline stocks also slipped. The drawdown in stockpiles as much as 7.20 million barrels in the week until July 21 was greater than the estimated 2.6 million barrel.
Oil analyst in PIRA Energy Jenna Delaney said that this movement marks the fourth consecutive week that total hydrocarbon stockpiles have been plunging whilst a time of year when they are usually rising.
Looking on prices, U.S. West Texas Intermediate (WTI) futures fell more than 0.3 percent or 14 cents to trade at $48.61 per barrel and international benchmark for oil Brent crude futures was 0.3 percent down as well or 15 cents to settle at $50.82 per barrel. On the previous trade, Brent advanced as high as 1.5 percent.
The released news regarding the plans of Saudi Arabia to curb its exports in crude about 6.6 million barrels per day (bpd) this August supported the idea that the bloated oil market is starting to stabilize. However, the tightening of supplies is still on watch, according to OCBC.
Some analysts are suggesting that futures may have head room because the gains recently could encourage a boost in output.