Crude slips in holiday trade

Oil prices were a bit lower on Thursday, but still remained near their highest level in two-and-a-half years amid optimism that the crude market was well on its way towards rebalancing.

U.S. West Texas Intermediate (WTI) crude futures shed 12 cents, or about 0.2%, to $57.92 a barrel by 3:45AM ET (0845GMT). It touched its highest level since July 2015 at $58.15 in the last session.

Meanwhile, Brent crude futures, the benchmark for oil prices outside the U.S., were at $63.21 a barrel, down 18 cents, or around 0.3%, from its last close.

Trade volumes were expected to remain light on Thursday, with U.S. markets closed for the Thanksgiving holiday.

Oil prices surged on Wednesday as a drop in U.S. crude stockpiles added optimism to a rally underpinned by hopes for an OPEC deal extension.

Crude oil inventories fell by 1.9 million barrels, according to the EIA, marking the first decline in three weeks. That compared with analysts’ expectations for a decline of 1.5 million barrels.

Domestic stocks have dropped by 15% from their records in March, to below 2016 levels, boosting optimism that the U.S. oil market is tightening.

Prices received additional support from growing signals that the Organization of Petroleum Exporting Countries (OPEC) and its allies will agree to prolong supply curbs beyond March when producers meet in Vienna next week.

Top crude exporter Saudi Arabia is lobbying oil ministers to agree on a nine-month extension to OPEC-led supply cuts, sources familiar with the matter said, as Riyadh seeks to ensure a price-sapping glut is eradicated.

OPEC, together with a group of non-OPEC producers led by Russia, has been restraining output since the start of this year in a bid to end a global supply overhang and prop up prices.

The deal to curb output is due to expire in March 2018, but OPEC will meet on Nov. 30 to discuss the outlook for the policy.

In other energy trading, gasoline futures inched up 0.6 cents, or 0.4%, to $1.773 a gallon, while heating oil was little changed at $1.933 a gallon.

Natural gas futures dropped 1.6 cents, or 0.5%, to a more than three-week low of $2.952 per million British thermal units, after data in the last session showed that domestic supplies in storage fell less than forecast last week.