Oil Climbs After Surprise Decline in U.S. Crude Stockpiles
Oil resumed its decline on indications U.S. crude inventories expanded for a sixth week, the longest run of gains in almost a year
(Bloomberg) -- Oil touched $56 a barrel for the first time in almost a month after a surprise drop in U.S. crude supplies signaled strengthening demand.
Futures rose 2.7% in New York on Wednesday, the biggest increase since the Saudi Attacks five weeks ago. The Energy Information Administration reported that American crude inventories fell by 1.7 million barrels last week and gasoline stockpiles shrank more than forecast. Imports of foreign crude slumped to the lowest in more than two decades.
“There’s a fair bit to like in this report,” said Matt Sallee, portfolio manager at Tortoise, a Kansas firm that oversees more than $21 billion in assets. “We view inventories moving lower from here.”
Oil has been under pressure since late April as the U.S.-China trade war dented the demand outlook and global supplies swelled. Earlier this month, OPEC Secretary-General Mohammad Barkindo said the group would do “whatever it takes” to prevent another oil slump.
West Texas Intermediate crude for December delivery rose $1.49 to settle at $55.97 a barrel on the New York Mercantile Exchange. The front-month contract last topped the $55 mark on September 27.
Brent for December settlement rose $1.47 to close at $61.17 on the London-based ICE Futures Europe Exchange. The global benchmark crude traded at a $5.20 premium to WTI.
On a seasonal basis, American gasoline demand is at its highest since at least 1991, the EIA report indicated. “That’s showing the strength of the U.S. economy,” Sallee said.
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To contact the reporter on this story: Jacquelyn Melinek in New York at jmelinek@bloomberg.net
To contact the editors responsible for this story: David Marino at dmarino4@bloomberg.net, Catherine Traywick, Christine Buurma
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