Oil extended gains from the highest close in three years as U.S. industry data showed crude stockpiles continued to decline and as OPEC production held steady last month.
Futures rose 0.8 percent to above $62 a barrel in New York after adding 2.1 percent on Wednesday. Inventories slid by 4.99 million barrels last week, the American Petroleum Institute was said to report. Government data Thursday is forecast to show supplies fell by 4.7 million barrels, which will be a seventh weekly decrease. OPEC’s output was unchanged in December as the group approached a fresh year of curbs, a Bloomberg survey shows.
Oil is extending gains after climbing more than 12 percent last year as the Organization of Petroleum Exporting Countries and its allies cut output to trim a global glut. However, the recent surge in New York crude may lead to growth in U.S. drilling and supply. The rig count will “substantially increase” with crude prices between $61 and $65 a barrel, according to 42 percent of industry executives surveyed by the Dallas Federal Reserve last month.
“We may soon see an end to the rally because prices at this level will only make U.S. drillers boost production,” said Will Yun, a commodities analyst at Hyundai Futures Corp. “Supply disruptions in the North Sea and Libya, falling U.S. stockpiles, and conflict in Iran have underpinned the momentum.”
West Texas Intermediate for February delivery was at $62.10 a barrel on the New York Mercantile Exchange, up 47 cents, at 1:46 p.m. in Hong Kong. Total volume traded was about 39 percent above the 100-day average. Prices closed at $61.63 on Wednesday, the highest level since December 2014.
Brent for March settlement added 29 cents to $68.13 a barrel on the London-based ICE Futures Europe exchange after climbing 1.9 percent Wednesday to the highest close since December 2014. The global benchmark crude traded at a premium of $6.17 to March WTI.
OPEC’s 14 members pumped 32.47 million barrels a day in December, according to a Bloomberg survey of analysts, oil companies and ship-tracking data. Libya saw a 30,000-barrel-a-day decline to 970,000 a day following a pipeline blast, which was offset by an increase from Nigeria.
Iraq exported near-record levels of oil from the south in December as the federal government seeks to make up for production disruptions after territorial disputes in the country’s north.