* Genscape report is said to show draw from Cushing stocks
* Saudi Arabia, Russia crude production ramping back up
By Erin Douglas
Oil recovered from the lowest level in more than a month amid signs the supply drain from the biggest U.S. supply hub will continue.
Prices rose as much as 1.6 percent after a Genscape report was said to show Cushing, Oklahoma, inventories sank 1.1 million barrels from Friday to Tuesday. That follows 11 straight weeks of declines in government data that have left the delivery point for the benchmark U.S. futures contract at the lowest level since 2014. Futures touched the lowest since June 22 earlier as OPEC and Russia boosted production.
U.S. oil hub stockpiles at lowest since 2014
“This is another wake up call that reminds us that demand is strong,” said Phil Flynn, senior market analyst for Price Futures Group Inc. “That’s a pretty big draw. It turned the market around.”
U.S. government data Wednesday showed a surprise gain in nationwide stockpiles. Meanwhile, the Organization of Petroleum Exporting Countries’s July output climbed as Saudi Arabia pumped near-record volumes while Russia boosted production to levels not seen since it joined the cartel in a coordinated cut in January 2017.
West Texas Intermediate crude for September delivery rose $1.04 to $68.70 a barrel at 11:28 a.m. on the New York Mercantile Exchange. Total volume traded Thursday was about 30 percent below the 100-day average.
Brent for October settlement gained 77 cents to $73.16 a barrel on the London-based ICE Futures Europe exchange. The global benchmark traded at a $5.74 premium to WTI for the same month.
The higher supplies from OPEC and Russia are contributing to growing signs of a new glut in the oil market. That’s adding to concern a trade war between the U.S. and China could curb economic growth and limit energy demand, which last month drove crude to the biggest decline in two years.
“We’re seeing continued negative sentiment, driven by worries over growth and demand,” said Ole Sloth Hansen, head of commodity strategy at Saxo Bank A/S in Copenhagen.
U.S. crude inventories rose 3.8 million barrels last week, according to data from the Energy Information Administration. That compares with a forecast for a 3-million-barrel decline in a Bloomberg survey of analysts.
Other oil-market news:
* The Trump administration said it’s weighing whether to increase the proposed tariff on $200 billion of Chinese goods, from 10 percent to 25 percent, stepping up pressure on Beijing to change its trade practices.
* Observed exports of crude and condensate from the Persian Gulf fell in July, dropping to the lowest level since January, according to Bloomberg tanker tracking.
–With assistance from Tsuyoshi Inajima, Grant Smith and Catherine Ngai.
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