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. Last Updated: 07/27/2016

Crude Oil Prices Climbing Back to Near $30 per Barrel

The nation’s oil exporters and the government seem assured of more high returns as oil prices neared $30 per barrel on leading exchanges Wednesday.

September Brent crude traded 75 cents higher at $29.65 in London on Wednesday. New York Mercantile Exchange crude oil and product futures moved sharply higher early Wednesday as U.S. petroleum inventories remained tight last week.

Russian benchmark Urals blend trades at a discount from 50 cents to $3 lower than international benchmark Brent. Urals blend had fallen under $25 per barrel last month as members of the Organization of Petroleum Exporting Countries pledged to boost supplies to hold the price of a basket of crude oils between $22 and $28.

This year’s budget is based on a price of $18 per barrel, but exporters and the government have enjoyed much higher revenues while world prices have stayed at about three times the levels they were at the beginning of 1999.

American Petroleum Institute data showed U.S. crude stocks dipped 2.1 million barrels to 282.6 million barrels in the week ending Aug. 4, the lowest it has ever seen since March 1976.

In the previous week, ending July 28, U.S. crude stocks had plunged 9 million barrels, the API said. The U.S. Energy Information Administration later confirmed the surprise drop as it reported an even bigger decline of more than 10 million barrels for that week.

Heating oil and gasoline futures rose as both the API and EIA reported draws in distillate and gasoline stocks last week. Distillate stocks, which include heating oil, dipped 1.2 million barrels, the API said. The EIA reported a smaller drop of 500,000 barrels. Gasoline stocks fell 1.7 million barrels, both reports said.

September heating jumped more than 2.0 cents early and was trading at 82.20 cents a gallon, up 2.37 cents.

September gasoline traded at 87.45 cents, up 1.17 cents, near its early high of 87.50 cents.

(Reuters, MT)