UPDATE: Oil tallies 6-session climb to end at a more than two-week high

06/29/17 03:29 PM EDT

By Myra P. Saefong, MarketWatch , Rachel Koning Beals

Oil likely to stick near $45 a barrel: Goldman Sachs

Crude-oil prices tallied a sixth-straight gain Thursday, a day after U.S. data revealed a sizable weekly decline in domestic crude production.

But returns were modest, as some analysts pointed out that the crude output decline is likely temporary, given the effect of storm disruptions to activity in the Gulf of Mexico. Others pondered whether the slide in prices was at last putting at least a dent in the U.S. shale ramp up.

Meanwhile, prices for natural gas settled lower, pulling back after a five-session rally, despite data showing a smaller-than-expected weekly rise in U.S. stockpiles of the fuel.

August West Texas Intermediate crude added 19 cents, or 0.4%, to settle at $44.93 a barrel on the New York Mercantile Exchange. That was the highest finish since June 13, FactSet data show. Brent oil for August delivery , which expires at Friday's settlement, rose 11 cents, or 0.2%, to $47.42 a barrel on the ICE Futures Europe exchange.

Month to date, WTI and Brent have trimmed their sharp losses to a still substantial 6.9% and 5.7%, based on FactSet data tracking the most-active contracts.

The resiliency and the increasing efficiency demonstrated by U.S. producers has helped to undercut efforts led by the Organization of the Petroleum Exporting Countries to lower global inventories. Since January, when OPEC members and Russia began cutting output, oil prices have fallen more than 16% and the glut has remained.

Read:OPEC, have no fear: The U.S. oil-shale output crash is here (http://www.marketwatch.com/story/opec-have-no-fear-the-us-oil-shale-output-crash-is-here-2017-06-27)

Data Wednesday from the U.S. Energy Information Administration showed that total domestic crude production (http://ir.eia.gov/wpsr/overview.pdf) fell by 100,000 barrels a day to 9.25 million barrels a day for the week ended June 23.

The EIA also reported that domestic crude supplies edged up (http://www.marketwatch.com/story/oil-seesaws-as-eia-reports-modest-rise-in-us-crude-supplies-2017-06-28) by 100,000 barrels last week. That defied forecasts for a decline of 3.25 million barrels by analysts surveyed by S&P Global Platts.

Tropical storm Cindy hit the Gulf of Mexico last week, and most analysts expected the storm's disruption to production in the region to prompt a decline in domestic crude stockpiles.

On Thursday, Société Générale sharply cut its forecasts (http://www.marketwatch.com/story/societe-generale-cuts-2017-2018-oil-price-forecasts-sharply-2017-06-29) on Brent and WTI crude prices for this year and next, citing higher supplies from the U.S. as well as OPEC members Libya and Nigeria.

Data from the EIA Wednesday, despite the onset of U.S. driving season, showed that gasoline demand in the last four-week period fell 2.7% from a year earlier, while production of gasoline increased. Gasoline stockpiles declined by 900,000 barrels, according to the EIA.

On Nymex, July gasoline rose less than half a cent to $1.486 a gallon, while July heating oil tacked on 1.3 cents, or 0.9%, to $1.446 a gallon. The July contracts expire at Friday's settlement.

Read:Drivers may pay the lowest July 4 gasoline prices in 12 years (http://www.marketwatch.com/story/drivers-may-pay-the-lowest-july-4th-gasoline-prices-in-12-years-2017-06-27)

Natural-gas futures on Nymex ended lower Thursday, with the August contract down 5.2 cents, or 1.7%, to $3.042 per million British thermal units.

The EIA Thursday showed that U.S. supplies of natural gas rose by 46 billion cubic feet last week (http://www.marketwatch.com/story/natural-gas-prices-turn-higher-as-eia-reports-smaller-than-expected-rise-in-us-supplies-2017-06-29). Analysts surveyed by S&P Global Platts forecast a larger build of 52 billion cubic feet.

-Myra P. Saefong; 415-439-6400; AskNewswires@dowjones.com

 

(END) Dow Jones Newswires

06-29-17 1529ET

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