| SINGAPORE, April 5
SINGAPORE, April 5 Oil prices climbed on
Wednesday on signs of gradual tightening in a market bloated by
years of overproduction that has left storage tanks around the
world brimming with unsold fuel.
Prices for front-month Brent crude futures, the
international benchmark for oil, were at $54.28 per barrel at
0149 GMT, up 11 cents from their last close.
In the United States, West Texas Intermediate (WTI) crude
futures were up 16 cents at $51.19 a barrel.
Traders said that slowly tightening market conditions were
driving price rises, with the Organization of the Petroleum
Exporting Countries (OPEC) leading an effort to cut output.
With most of OPEC's crude exported on tankers, tracking ship
movements can be a good gauge of market conditions.
Shipped oil supplies have reduced by as much as 17 percent
since the beginning of the year, according to oil analysis firm
"We have seen a significant reduction in global oil supply
since January, with oil on water going from 978 million barrels
on Jan. 1 to 812 million barrels on April 3," said Vortex chief
executive Fabio Kuhn.
"These changes are a signal that the rebalancing is
happening faster than many in the market believe."
Oil trading data in Thomson Reuters Eikon shows that OPEC
shipments to the rest of the world fell to 813.7 million barrels
by the end of March from 796.6 million barrels in January.
But the tighter markets will only gradually lead to a
reduction in bloated inventories as production in some
countries, especially the United States, is rising.
U.S. crude stocks fell by 1.8 million barrels last week to
533.7 million, still a near all-time record, according to data
released late Tuesday from the American Petroleum Institute.
The U.S. Energy Information Administration will issue its
inventory figures on Wednesday.
At the heart of the bloated U.S. market is rising
production, especially from shale drillers.
The U.S. rig count drilling for new oil rose for an 11th
straight week last week to 662, making the first quarter the
strongest for rig additions since mid-2011, according to energy
services firm Baker Hughes said.
Following a slump in 2015 and 2016, U.S. oil production
C-OUT-T-EIA has risen 8.5 percent since mid-2016 to 9.15
million barrels per day (bpd), the same level output stood at in
2014 when the market downturn began.
(Reporting by Henning Gloystein; Editing by Joseph Radford)