Oil bounces around as traders mull 3rd-weekly rise in U.S. supplies
EIA says crude stockpiles climbed 2.8 mln bbls last week
Oil futures saw volatile Wednesday, with prices pressured by data showing a third-consecutive weekly increase in U.S. crude inventories but continuing to find some support from successful efforts by major crude producers to cut back output.
March West Texas Intermediate crude CLH7, -0.08% was last up 9 cents, or 0.2%, to $53.27 a barrel on the New York Mercantile Exchange. It was trading at $52.90 before the release of U.S. government data on petroleum supplies. Prices fell immediately after the report, turned higher, then seesawed between minor losses and gains.
Benchmark Brent crude for March LCOH7, -0.23% was trading flat at $55.44 a barrel on the ICE Futures exchange in London.
“A crude build in line with both consensus and last night’s print was already built in to expectations, and after the initial body blow of a bearishly big gasoline build, crude is finding its feet again,” said Matt Smith, director of commodity research at ClipperData.
The U.S. Energy Information Administration reported Wednesday an increase of 2.8 million barrels in domestic crude-oil supplies for the week ended Jan. 20. That was in line with the 2.9 million-barrel climb reported by the American Petroleum Institute late Tuesday. Analysts polled by The Wall Street Journal were looking for a rise of 2.1 million barrels, while S&P Global Platts forecast a climb of 1.9 million barrels.
Gasoline supplies jumped up by 6.8 million barrels, while distillate stockpiles were “virtually unchanged” last week, according to the EIA. The S&P Global Platts survey called for a rise of only 830,000 barrels for gasoline stocks and a decline of 1.3 million barrels for distillates, which include heating oil.
February natural gas NGG17, +1.07% meanwhile, edged up by 6.3 cents, or 1.9%, to $3.342 per million British thermal units, head of an EIA update on supplies of the fuel due Thursday.
The EIA petroleum report, overall, was bearish, said Chris Kettenmann, chief energy strategist at Macro Risk Advisors. “Nevertheless, we believe bad is good with the Saudi put back in the market and would be buyers of the intraday pullback in crude oil.”
Oil prices have found support in recent weeks from plans by the Organization of the Petroleum Exporting Countries, including Saudi Arabia, and other producers to reduce output.
Around 1.5 million barrels a day has already been taken out of the market from about 1.8 million barrels a day agreed by major oil companies starting on Jan. 1, energy ministers said on Sunday, as producers look to reduce oversupply.
But as OPEC is cutting, U.S. production is starting to rise.
Total U.S. crude output edged up by 17,000 barrels a day to 8.961 million barrels a day last week, the EIA report showed.
President Donald Trump’s promise to support the U.S. oil industry has encouraged analysts to raise their forecasts of growth in U.S. oil production, which is already benefiting from higher prices.
A push by Republicans in the U.S. House of Representatives for a shift to border-adjusted corporate tax could help push U.S. crude prices higher than global benchmark Brent, triggering large-scale domestic production, according to Goldman Sachs.
—Naveen Thukral contributed to this article.