Crude oil prices shot back toward the $70 mark early Thursday after reports of a drain in gasoline inventories as traders shrugged off big U.S. oil gains.

Crude oil prices seeped into negative territory early Wednesday amid expectations of a build in U.S. crude oil inventories. Investors have been wary that a bullish tone to 2018 so far would bring shale oil drillers back into play, and the U.S. government has reported that total production bested Saudi Arabia already late last year.

The market reversed course after the U.S. Energy Information Administration reported gasoline inventories dropped by almost 2 million barrels last week, and distillates like diesel declined by about the same. More U.S. crude oil, meanwhile, continues to pour into the global market, giving traders enough demand indicators to shrug off the build of 6.8 million barrels in crude.

The decline in products in the world's largest economy could be indicative of demand and help drive sentiment that the market is moving closer to balance.

The price for Brent crude oil was up 0.83 percent to $69.46 per barrel as of 9:17 a.m. EST. West Texas Intermediate, the U.S. benchmark for the price of oil, was up 0.9 percent to $65.31 per barrel.

Traders are watching the spread, or difference, between Brent and WTI closely as the discount on the U.S. benchmark makes it more competitive in some markets, incentivizing exports.

Giovanni Staunovo, a commodity analyst for UBS, told UPI the record-breaking output from the United States would normally send oil prices into negative territory.

"It seems the focus was as well on U.S. strong oil demand growth and the inventory products decline is lending support to prices," he said.

Elsewhere, the U.S. Labor Department added more support when reporting first-time claims for unemployment dropped 1,000 for the week ending Jan. 27. The less-volatile four-week moving average declined by 5,000 claims.

In a separate report, non-farm labor productivity slipped 0.1 percent in the fourth quarter, its lowest since first quarter 2016. Labor costs increased because of a 1.8 gain in wages, while hours worked increased by 2.1 percent.

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Cuban oil drilling one step closer to reality
Washington (UPI) Jan 31, 2018
Cuban authorities have issued the local consent necessary to move forward with plans for oil drilling onshore, Australia's Melbana Energy said Wednesday. Melbana is one of the few foreign companies, and the only one listed on the Australian stock exchange, working on the ground in Cuba. The company said Wednesday it was granted a certificate the confirms it met local and community regul ... read more

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