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Crude Oil Prices Shrug Off Massive Build in Supplies to Settle 1% Higher

Published 2018-05-02, 02:42 p/m
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Investing.com - Crude oil prices settled higher despite data showing a build in crude oil and gasoline supplies for the second-straight week.

On the New York Mercantile Exchange crude futures for June delivery rose 68 cents, or 1.01%, to settle at $67.93 a barrel, while on London's Intercontinental Exchange, Brent rose 0.51% to trade at $73.50 a barrel.

Inventories of U.S. crude rose by 6.218 million barrels for the week ended April 27, confounding expectations for a build of just 0.739 million barrels, according to data from the EIA.

Gasoline inventories – one of the products that crude is refined into – unexpectedly rose by 1.171 million barrels, missing expectations for a decline of 0.587 million barrels, while supplies of distillate – the class of fuels that includes diesel and heating oilfell by 3.900 million barrels, beating expectations for a draw of 1.360 million barrels.

The expansion in U.S. production, meanwhile, continued unabated, to 10.6 million barrels per day. The ongoing expansion in US crude added to investor concerns after the EIA reported Monday U.S. oil production rose to a record 10.264 million barrels a day in February.

The mostly bearish data pressured crude oil prices to retreat intraday but losses were limited, however, as the threat of disruption to Iranian crude exports supported sentiment.

U.S. President Donald Trump has until May 12 to decide whether to decide whether to restore U.S. sanctions on Iran.

Market participants widely expect Trump to scrap the Iranian nuclear deal, leading to the re-imposition of secondary sanctions on Iran, pressuring countries to cut their purchases of Iranian crude.

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