NEW YORK (Reuters) – Oil prices rose to two-week highs on Thursday, boosted by data showing a surprise draw in U.S. crude inventories and also by a drop in the dollar.
West Texas Intermediate (WTI) crude CLc1 futures rose $1.09, or about 1.8 percent, to settle at $62.77 a barrel. U.S. crude traded between $60.75 and $63.09, its highest since Feb. 7.
Brent crude LCOc1 futures rose 97 cents to settle up about 1.5 percent at $66.39 a barrel. It hit a two-week peak at $66.56.
U.S. crude inventories USOILC=ECI unexpectedly fell 1.6 million barrels last week as net imports dropped to a record low and exports surged, while inventories declined further at the key storage hub in Cushing, Oklahoma, according to data from the Energy Information Administration (EIA).
Crude inventories had been forecast to rise 1.8 million barrels, as stocks seasonally increase when refineries cut intake to conduct maintenance.
“Weekly EIA data was particularly supportive to WTI considering U.S. and Cushing draws, a boost in crude exports above 2 million bpd and flat crude production,” said Anthony Headrick, energy market analyst at CHS Hedging LLC in Inver Grove Heights, Minnesota.
Crude stocks at the Cushing, Oklahoma, delivery hub for U.S. futures USOICC=ECI fell 2.7 million barrels last week, the ninth straight week of drawdowns, the EIA said.
“The reason that the inventories continue to drop at Cushing is because the market remains backwardated and therefore it’s uneconomical to be storing crude,” said Andrew Lipow, president of Lipow Oil Associates in Houston, Texas.
In a market structure called backwardation, prompt crude prices are higher than forward prices, discouraging storage.
“It makes more sense to liquidate your on-hand inventories,” Lipow said.
U.S. net crude imports USOICI=ECI fell 1.6 million barrels per day to just below 5 million bpd last week, the lowest level since the EIA started recording the data in 2001.
Exports of U.S. crude jumped to just above 2 million bpd, close to a record 2.1 million hit in October. That helped push net imports to the lowest level on record.
The Louisiana Offshore Oil Port (LOOP), the largest privately owned crude terminal in the United States, completed the first very large crude carrier (VLCC) crude oil loading operation at its deepwater port, the company said on Sunday. The supertankers can ship about 2 million barrels of oil.
Oil prices were also supported as the dollar .DXY declined from an eight-day peak. [L2N1QC181] A weaker dollar makes oil and other dollar-denominated commodities cheaper for holders of other currencies.
The correlation between moves in the oil price and the dollar has strengthened in recent weeks, as investors increasingly sell other assets to buy the U.S. currency on expectations of a faster pace of rate rises.
Additional reporting by Henning Gloystein in Singapore and Amanda Cooper in London; Editing by Marguerita Choy and David Gregorio