West Texas Intermediate advanced after a government report showed inventories at Cushing,Oklahoma, fell for a second week.
Prices rallied as much as 1.4 percent. Supplies at the delivery point for WTI futures shrank by 2.67 million barrels last week, the Energy Information Administration reported. WTI also rose as China imported a record volume of crude in January.
“The Cushing draw is helping boost WTI prices,” said Gene McGillian, an analyst and broker at Tradition Energy in Stamford, Connecticut. “We have positive indications that Chinese crude-oil imports set another record. Crude’s rally marches on.”
WTI for March delivery advanced $1.09, or 1.1 percent, to $101.03 a barrel at 10:42 a.m. on theNew York Mercantile Exchange. Oil traded at $101.21 a barrel before the report.
Brent for March settlement climbed 37 cents, or 0.3 percent, to $109.05 a barrel on the London-based ICE Futures Europe exchange. The European benchmark’s premium over WTI was $8.02 after closing at $8.74 yesterday.
Cushing supplies dropped to 37.6 million barrels, the EIA, the Energy Department’s statistical arm, reported. The industry-funded American Petroleum Institute said yesterday that supplies at the hub fell by 2.49 million last week.
The southern leg of TransCanada Corp.’s (TRP) Keystone XL link began moving oil to the Texas Gulf Coast from Cushing last month. The line was initially flowing at 288,000 barrels a day and will ramp up over the course of the year toward the 700,000-barrel capacity, executives said in a Jan. 22 press conference at the company’s headquarters in Calgary.
“It looks like the completion of pipelines is ending the bottleneck at Cushing,” said Michael Lynch, the president of Strategic Energy & Economic Research in Winchester, Massachusetts.
U.S. total inventories of crude oil climbed by 3.27 million barrels to 361.4 million. Analysts surveyed by Bloomberg had expected a gain of 2.6 million. Supplies of distillate fuel, including heating oil and diesel, decreased by 731,000 to 113.1 million.
China’s overseas purchases of crude increased about 12 percent from a year ago to 28.15 million metric tons, according to data on the website of the General Administration of Customs today. That’s about 6.66 million barrels a day, 5.2 percent more than the previous record of 6.33 million in December.
Sourced from Bloomberg