Oil rose after government data showed U.S. crude and gasoline stockpiles continue to fall, allaying anxiety about a supply glut.
Futures rose 1.6 percent in New York on Wednesday. U.S. crude inventories fell 4.73 million barrels last week, the Energy Information Administration reported. Gasoline supplies shrank 4.45 million barrels, the most since March. The data contradicted Tuesday’s industry report that showed a surprise build in crude.
“It’s definitely a bullish report here today,” said John Kilduff, a partner at Again Capital LLC, a New York-based hedge fund. “Across-the-board draw-downs can’t be ignored.”
Oil has lingered below $50 a barrel despite an agreement by the Organization of Petroleum Exporting Countries and its allies to curb output amid stubbornly high global supplies. Concern is growing that the deal may fray after OPEC member Ecuador said this week that it won’t be able to maintain its pledged cuts.
“Only continuous falls in total U.S. commercial and crude oil stocks will provide us with credible evidence that rebalancing is, in fact, happening,” said Tamas Varga, an analyst at PVM Oil Associates Ltd. in London.
West Texas Intermediate for August delivery, which expires Thursday, rose 72 cents to settle at $47.12 a barrel on the New York Mercantile Exchange.
Brent for September settlement rose 86 cents to close $49.70 a barrel on the London-based ICE Futures Europe exchange. The global benchmark crude traded at a premium of $2.38 to September WTI.
Ecuador Oil Minister Carlos Perez said late on Monday the nation will start raising oil production this month to boost government revenue. On Tuesday, after speaking with Saudi Arabia’s energy minister, Perez issued a statement saying his country and the Saudis remain committed to reducing inventories to a “normal” level as part of OPEC’s strategy to boost crude prices.
Saudi Arabian crude shipments to U.S. drop to seven-year low Libya will participate in a technical meeting with fellow OPEC members as well as Russia in St. Petersburg on July 22 to share the “factors enabling and constraining Libya’s production recovery,” said Mustafa Sanalla, chairman of state-run National Oil Corp.