Oil prices near $50 per barrel
Oil prices edged closer to the $50 mark Wednesday as U.S. motorists and other users continued to slurp through the glut, lowering inventories.
The price of West Texas Intermediate oil, the U.S. benchmark crude, rose 94 cents to $49.56 following reports late Tuesday that the American Petroleum Institute's crude inventory count fell 5.2 million barrels for the week. The price of Brent crude, the global benchmark, rose $1.13 to $49.74.
Even as oil prices edge up, motorists getting ready for the Memorial Day weekend may sense they are getting a bargain. A gallon of regular gas averaged $2.304 Wednesday, AAA's Fuel Gauge Report states, compared to $2.74 a year ago.
The Energy Information Administration says U.S. crude oil inventories slipped by 4.2 million barrels in the week ending May 20.
Signs of falling inventories suggest declining supply, increasing demand or some combination of both — a recipe for increasing oil prices.
Another factor influencing oil's movement was a report that France is tapping strategic oil reserves to bolster supply following strikes by oil workers.
Although still far below historical highs, oil prices of $50 per barrel could help many U.S. oil and gas producers stay afloat. Just a few months ago, the industry was facing a sweeping fallout after oil briefly fell below $30 per barrel.
Still, there's no indication that the commodity will surge much higher. Goldman Sachs analysts said Sunday in a research note that they expect prices to hover in the $50 to $60 range through 2020.
And the pain is far from over. Royal Dutch Shell announced Wednesday that it would shed an additional 2,200 jobs globally in 2016 on top of the 2,800 it had previously planned to cut.
The company also cut 7,500 positions in 2015.
"These are tough times for our industry and we have to take further difficult decisions to ensure Shell remains competitive through the current, prolonged downturn," Shell said in a statement.
The EIA also noted Wednesday that oil inventories remain at "historically high levels for this time of year."
Follow USA TODAY reporter Nathan Bomey on Twitter @NathanBomey.