UPDATE: U.S. oil prices tilt higher by the finish to hold ground at 3-year highs

04/12/18 03:26 PM EDT

By Myra P. Saefong and Barbara Kollmeyer, MarketWatch

OPEC crude output falls in March, global supplies rise

Oil prices settled on a mixed note Thursday, with the global crude benchmark ending slightly lower, but the U.S. benchmark shifting higher late in trading session to hold ground at a more than three-year high.

Investors followed developments in the Middle East, including the possibility of a U.S. strike on Syria, which have the potential to disrupt the flow of crude in the region. U.S. West Texas Intermediate crude got a boost from reports Thursday afternoon that the Saudis intercepted (http://www.arabnews.com/node/1283746/saudi-arabia) another missile attack, this time over Jazan. That followed reports Wednesday that the Saudis (http://www.marketwatch.com/story/oil-prices-jump-on-reports-of-missile-interception-over-saudi-arabia-2018-04-11) shot down a missile over Riyadh.

"Tensions surrounding Syria, and separately, Saudi Arabia, have invited a geopolitical fear bid into the market, helping push futures up to the new highs," Tyler Richey, co-editor of the Sevens Report, told MarketWatch.

Traders also weighed data from the monthly report from Organization of the Petroleum Exporting Countries, which said the group's crude production fell in March, but total global supplies climbed on the heels of rising output from non-OPEC producers.

May West Texas Intermediate crude rose 25 cents, or 0.4%, to settle at $67.07 a barrel on the New York Mercantile Exchange. It marked its highest settlement since Dec. 3, 2014, for the second session in a row.

June Brent crude , the global benchmark, declined by 4 cents, or less than 0.1%, to $72.02 a barrel on ICE Futures Europe. It pared much of its earlier losses, after ending at a more than three-year high of $72.06 Wednesday.

Read:Geopolitical risk matters again. Here's what it means for the markets (http://www.marketwatch.com/story/commodities-are-beating-the-stock-market-as-geopolitical-risk-returns-2018-04-11)

(http://www.marketwatch.com/story/commodities-are-beating-the-stock-market-as-geopolitical-risk-returns-2018-04-11)President Donald Trump tweeted early Wednesday that the U.S. relationship with Russia (https://twitter.com/realDonaldTrump/status/984032798821568513) "is worse now than it has ever been, and that includes the Cold War." He appeared to suggest that a strike against Damascus might be imminent, in a separate tweet (https://twitter.com/realDonaldTrump/status/984022625440747520).

Geopolitical risks overshadowed what was a "relatively bearish set of inventory data" Wednesday from the Energy Information Administration, "which reported a move higher for U.S. crude stocks alongside continued gains from the production side," said Robbie Fraser, commodity analyst at Schneider Electric, in a daily note.

The EIA had reported a bigger-than-expected weekly rise of 3.3 million barrels (http://www.marketwatch.com/story/oil-prices-rise-on-heightened-middle-east-tensions-2018-04-11) in U.S. crude stockpiles. It pegged total domestic output at 10.525 million barrels a day for the week ended April 6, up 65,000 barrels.

Meanwhile, a monthly OPEC oil report Thursday showed that the group's total crude (http://www.marketwatch.com/story/opec-oil-output-falls-in-march-as-us-shale-production-grows-2018-04-12) output declined by 201,000 barrels a day in March to average 31.96 million barrels a day. It also revealed, however, that total global oil supply rose by 180,000 barrels a day last month because of producers outside of OPEC, including the U.S.

Also read:OPEC says China's oil futures contract promising but 'has a long way to go' (http://www.marketwatch.com/story/opec-says-chinas-oil-futures-contract-promising-but-has-a-long-way-to-go-2018-04-12)

Among refined products Thursday, May gasoline slipped 0.6% to $2.055 a gallon and May heating oil ended down 0.4% at $2.084 a gallon.

Natural-gas futures finished higher after the EIA on Thursday said U.S. supplies (http://www.marketwatch.com/story/natural-gas-prices-head-higher-as-us-natural-gas-supply-falls-more-than-expected-2018-04-12) of commodity fell by 19 billion cubic feet for the week ended April 6. The market was generally expecting a decline in the range of 8 billion to 15 billion cubic feet, according to Schneider Electric.

Seasonal averages call for a slight build in supplies at this time of year, but "a late round of cooler temperatures pulled demand above normal of late," said Fraser.

May natural gas rose 0.4% to $2.686 per million British thermal units.

--Biman Mukherji contributed to this article

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

 

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04-12-18 1526ET

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