Oil Rises as Fuel Demand Outweighs Equity Slump, Dollar Gain
Oil Stays Near $56 as Crude Stockpile Jump Offset by Fuel Draw
(Bloomberg) -- Oil posted the first gain in three days as a government report showing stronger U.S. fuel demand overshadowed a slump in equities.
Futures closed 0.8 percent higher after rising as much as 1.4 percent earlier in the session. The day’s gains were limited by a strengthening greenback and faltering equities, while Wednesday’s inventory report showed growing demand and a substantial drop in fuel stockpiles that offset a large crude build.
“I think the report’s details were much less bearish than the headline,” said Kyle Cooper, consultant at Ion Energy Group in Houston. “There’s a slight bias higher, but not huge, with prices driven by equities and the next tweet. That’s just the reality of the market now.”
Oil has climbed this week as OPEC continues to cut production as part of its agreement to help balance global oil markets. Investors also await updates on trade negotiations between the U.S. and China.
West Texas Intermediate for April delivery rose 44 cents to close at $56.66 a barrel on the New York Mercantile Exchange.
Brent for May settlement gained 31 cents to settle at $66.30 a barrel on the London-based ICE Futures Europe exchange. The global benchmark crude was at a $9.27 premium over WTI for the same month.
Oil’s gains have been checked by fears of slowing global growth. The ECB President Mario Draghi announced Thursday that the bank was revising its outlook for Eurozone growth downward and would increase its stimulus efforts accordingly.
“This global economic slowdown is really weighing on the oil outlook,” said John Kilduff, partner at Again Capital LLC, a New York hedge fund focused on energy. “That’s what’s removed some of the gains and is certainly capping them.”
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--With assistance from Tsuyoshi Inajima, Heesu Lee and Grant Smith.
To contact the reporter on this story: Ben Foldy in New York at bfoldy@bloomberg.net
To contact the editors responsible for this story: James Herron at jherron9@bloomberg.net, Catherine Traywick, Jessica Summers
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