Economic security

Oil Climbs Above $45 Amid U.S. Crude Output Drop, Fed Statement

 Oil closed above $45 a barrel in New York for the first time since November after U.S. crude output dropped and Federal Reserve policy makers signaled they’re open to raising interest rates in June.

Crude production fell to 8.94 million barrels a day last week, the least since October 2014, Energy Information Administration data show. Futures fell on the initial release of the report because it showed crude inventories rose. Oil extended gains after the Federal Open Market Committee omitted previous language that “global economic and financial developments continue to pose risks,” instead saying officials will “closely monitor” such developments.

"We are focused on U.S. production, which was down again," said Cavan Yie, senior equity analyst at Manulife Asset Management Ltd. in Toronto. "Production is down about 650,000 barrels from the peak, and it’s going to keep dropping because nobody is spending any money to drill new wells."

Oil has rebounded since slumping to the lowest level since 2003 in February, amid signs the global surplus will ease as U.S. production declines. The World Bank boosted its forecast for oil prices this year, projecting that U.S. output cuts will steepen in the second half of 2016. Markets may rebalance by the end of the year, BP Plc Chief Executive Officer Bob Dudley said Tuesday as the company reported a surprise first-quarter profit.