Today, oil futures gained approximatley 2 percent after U.S. crude inventories unexpectedly plunged and as Saudi Arabia brushed aside the comments from U.S. President Donald Trump that seeks to keep the oil prices from rising.
Last week, government data revealed that U.S. crude stockpiles dropped 8.6 million barrels, in contrast to the expectations for a rise of 2.8 million barrels.
The drawdown breaks five consecutive weeks of builds. It was due to net crude imports slowing to a record low of 2.6 million barrels per day in the wake of declining the production of the OPEC and U.S. sanctions imposed against Venezuela.
U.S. crude futures settled at $56.94 per barrel, an increase of $1.44, or 2.6 percent, the largest daily percentage increase in almost four weeks. Brent crude futures increased by $1.18, or 1.8 percent, to end at $66.39 per barrel.
An nalyst at Price Futures Group in Chicago, Phil Flynn, stated: “Overall it’s a very positive report with stronger demand, and I do think you’re already seeing the impact from OPEC cuts.”
As a response to a tweet from Trump on Monday that said that the group must “relax” on production cuts, Khalid al-Falih, the Saudi Energy Minister, said that the Organization of the Petroleum Exporting Countries and its partners were already “taking it easy.”
CNBC reported that when Falih wasasked to comment on Trump’s tweet, he said in Riyadh: “The 25 countries are taking a very slow and measured approach”
He added: “Just as the second half of last year proved, we are interested in market stability first and foremost.”
This year, oil prices have increased by more than 20 percent so far after OPEC and non-member producer allies agreed to reduce the output for six months starting in January to avoid the build-up of a global surplus particularly as the crude production of the U.S. booms.
Falih said that the group may be required to extend its agreement to curb output until the end of the year.
U.S. crude output has set record highs for two straight weeks, reaching 12.1 million bpd last week, according to government data.