By Bloomberg News - March 26, 2017
Oil rose as an increase in US crude inventories was countered by a drop in fuel stockpiles in the world’s largest oil consumer.
Futures for May delivery added as much as 0.9 percent in New York after falling 0.4 percent on Wednesday. Speculation that refiners will increase oil purchases and reduce US crude supplies grew after data on Wednesday showed gasoline stockpiles slid a fifth week to the lowest since January and distillates dropped a sixth week to the least since December.
West Texas Intermediate (WTI) dipped below $50 a barrel this month for the first time in 2017, as swollen US inventories and rising American production weighed on output cuts by the Organization of the Petroleum Exporting Countries (Opec) and other producers. While Opec won’t decide until May whether to prolong the curbs, officials will meet this weekend in Kuwait to discuss their deal’s progress.
“Bulls were further disheartened” after “another week and another build in US crude-oil inventories”, said Tamas Varga, an analyst at PVM Oil Associates in London. “Product data, on the other hand, were price-supportive as both distillate and gasoline inventories fell harder than originally anticipated.”
WTI for May delivery rose as much as 44 cents to $48.48 a barrel on the New York Mercantile Exchange and was at $48.43 as of 9:56 a.m. London time. Total volume traded was about 40 percent below the 100-day average. The contract dropped 20 cents to $48.04 on Wednesday.
Brent for May settlement gained as much as 46 cents, or 0.9 percent, to $51.10 a barrel on the London-based ICE Futures Europe exchange. Prices on Wednesday traded below $50 for the first time since November 30. The global benchmark was at a $2.61 premium to WTI on Thursday.
US gasoline inventories fell by 2.8 million barrels to 243.5 million barrels, data from the Energy Information Administration (EIA) showed. Stockpiles of distillate fuel, a category that includes diesel and heating oil, declined to 155.4 million barrels. Crude supplies climbed by 4.95 million to 533.1 million barrels last week.
Libya’s crude production, meanwhile, has risen back to the level before clashes disrupted output three weeks ago and forced the Opec nation’s two biggest oil ports to halt shipments. Algeria’s state-run energy producer plans to boost crude-oil output by 14 percent in the four years to 2019 and invest billions of dollars in exploration projects.