By Henning Gloystein
SINGAPORE (Reuters) - Oil prices extended gains from the previous session in Asian trading on Thursday after a surprise third consecutive weekly U.S. crude inventory draw tightened the market.
U.S. West Texas Intermediate (WTI) crude oil futures
Prices jumped after the U.S. Energy Information Administration (EIA) surprised the market with a 6.2 million barrel fall in crude oil inventories last week to 504.6 million barrels. Forecasters in a Reuters poll had expected a 3.4 million-barrel build.
"Oil prices rose after EIA data showed U.S. crude inventories declined to the lowest level since February," ANZ bank said in a note on Thursday.
International benchmark Brent crude futures
Brent was lifted by an oil workers' strike in Norway, which threatened to cut North Sea crude output.
A weaker dollar <.DXY> after the Federal Reserve left U.S. interest rates unchanged also supported oil prices as it makes dollar-traded fuel imports cheaper for countries using other currencies.
Despite recent gains, analysts said that oil prices would likely remain range-bound at relatively low levels, putting pressure on oil producers.
"In a world of continued (U.S.) shale productivity gains that cause other oil producing regions around the world to become highly focused on cost competitiveness, we believe investors and companies should prepare for an environment of rangebound oil prices," Goldman Sachs said in a note to investors published late on Wednesday.
In a clear illustration of the impact on the ground of the oil industry's cost cutting and reduced exploration activity, the waters around Singapore have become the dumping ground for hundreds of drilling and offshore oil support vessels that have become surplus to requirement in the current era of cheap oil.
(Reporting by Henning Gloystein; Editing by Ed Davies)
Disclaimer: No Business Standard Journalist was involved in creation of this content
