By Christian Berthelsen
Oil prices rose Wednesday as data suggested U.S. crude
stockpiles declined for the first time this year, signaling the
glut of crude has started to abate.
The benchmark U.S. oil contract was up $1.60, or 2.7%, at $62.00
a barrel on the New York Mercantile Exchange, a nearly five-month
high. The global Brent benchmark was up $1.66, or 2.5%, at $69.18 a
barrel on the ICE Futures Europe exchange.
The gains extended a rally that has pushed oil prices up more
than 40% since late March, after dropping nearly 60% from last
June.
In data released after the market close late Tuesday, the
industry trade group American Petroleum Institute said nationwide
oil inventories fell by 1.5 million barrels last week, including a
decline of 300,000 barrels at the key delivery point in Cushing,
Okla. Official government data from the U.S. Department of Energy
is scheduled to be released at 10:30 a.m. EDT Wednesday.
The decrease would be a bullish surprise for the market;
analysts surveyed by The Wall Street Journal projected an increase
of 1.1 million barrels in the data. If the decline in stockpiles is
confirmed in the official data, it would be the first time
commercial crude inventories have fallen in the weekly report since
Dec. 26. Since the price rout in the oil market began last June,
U.S. oil production has crested above 9 million barrels a day, and
oil stockpiles have risen more than 25% to 491 million barrels.
An inventory decline "is likely to be interpreted by some market
participants as a sign that the market is beginning to tighten,"
Commerzbank said in a note.
Still, many analysts believe the market's price rally has been
overdone, well ahead of any actual recovery in supply and demand
fundamentals. "There is still a significant surplus of oil in the
world, especially in the U.S.," Dominick Chirichella of research
consultancy Energy Market Institute said in a note.
Refined product markets were on the upswing as well, with
gasoline futures up 1% at $2.0833 a gallon, the highest intraday
price since Nov. 13, and diesel futures making another run at a
bull market, up 1.4% at $2.0435 a gallon. The June diesel contract
must settle at $2.0275 a gallon to be an official bull market,
defined as a rise of 20% or more from a recent low.
Write to Christian Berthelsen at
christian.berthelsen@wsj.com
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