U.S. crude futures rallied from six-year lows a session earlier amid a weaker dollar, as a continuing draw in weekly stockpiles helped temporarily halt one of the worst routs in more than a decade.
On the New York Mercantile Exchange, WTI crude for September delivery wavered between $42.80 and $43.88 a barrel before closing at 43.22, up 0.15 or 0.34% on the day. On Tuesday, U.S. crude futures dove more than 4%, suffering its worst one-day fall in more than a month, to dip to its lowest level since 2009.
On the Intercontinental Exchange (ICE), brent crude for September delivery traded in a tight range between 49.29 and 50.53 a barrel before settling at , up 0.45 or 0.91% on the session. The spread between the international and U.S. benchmarks of crude stood at 6.93, above Tuesday’s level of $6.57.
In its Weekly Petroleum Status Report on Wednesday, the U.S. Energy Information Administration (EIA) said U.S. crude inventories for the week ending August 7 fell by 1.7 million barrels, in line with forecasts for a 1.6 million decline. The moderate draw extends sharp declines from a week earlier when U.S. crude stockpiles plunged by 4.4 million barrels in the final week of July. At 453.6 million, crude inventories nationwide remain near its highest level at this time of year in at least 80 years.
The announcement of the latest supply draw occurred one day after the EIA downgraded its latest projections for oil production growth for the remainder of 2015, as well as next year. For the rest of the year, the Energy Department expects crude output to rise by 650,000 barrels per day below previous forecasts of 750,000. In 2016, the EIA anticipates slower production growth of 130,000 bpd in comparison with prior estimates of 190,000. Last week, U.S. crude output declined by 70,000 bpd to 9.395 million bpd, its lowest level since early-May.
“While U.S. crude oil production this year is expected to be 100,000 barrels per day less than previously forecast, oil output is still on track to be the highest since 1972,” EIA administrator Adam Sieminski said in a statement.