International oil benchmark, Brent crude, fell by five per cent to a two-month low on Thursday after the United States government reported a weekly crude draw within analysts’ forecasts, disappointing market bulls who had expected larger declines.
Brent, against which half of the world’s oil is priced, was down by $2.35 to $46.45 per barrel as of 7:35pm Nigerian time. The session low was $46.27, the lowest since May 11, according to Reuters.
US West Texas Intermediate crude fell by $2.28 to $45.15 per barrel. It earlier hit a two-month low at $44.87.
The Energy Information Administration, the statistical arm of the US Energy Department, said crude stockpiles fell by 2.2 million barrels for the week ended July 1, drawing for a seventh week in a row.
But the EIA’s figure came in just below the decline of 2.3 million barrels forecast by analysts in a Reuters poll, but far less than the 6.7 million-barrel draw reported by trade group, the American Petroleum Institute, late on Wednesday.
“Expectations were high for this report, and they were dashed,” said a partner at New York energy hedge fund, Again Capital, John Kilduff.
Oil prices have risen by more than 70 per cent from 12-year lows of around $27 for Brent and $26 for US crude in the first quarter, driven by unexpected crude supply outages from Nigeria to Canada.