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UPDATE 9-Oil rallies as U.S. gasoline inventory draw offsets crude build

Published 2019-04-10, 02:59 p/m
© Reuters.  UPDATE 9-Oil rallies as U.S. gasoline inventory draw offsets crude build
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* Steepest draw in U.S. gasoline inventories since Sept 2017

* Venezuela reports collapse in oil supply -OPEC

* UAE energy minister says Russia committed to OPEC+ oil cuts (Updates prices and market activity to settlement; adds analyst comments)

By Laila Kearney

NEW YORK, April 10 (Reuters) - Oil futures climbed more than 1 percent on Wednesday after U.S. data showing a deep decline in gasoline stocks overrode a rise in crude inventories to 17-month highs, and as an OPEC report showed further tightening of Venezuela's crude supply.

International benchmark Brent futures LCOc1 settled at $71.73 a barrel, gaining $1.12, or 1.59 percent, after hitting a five-month high of $71.78 a barrel. U.S. West Texas Intermediate (WTI) crude CLc1 oil futures settled at $64.61 a barrel, rising 63 cents, or 0.98 percent, holding just below its strongest level since mid-November.

"At the end of the day, that big gasoline stock draw was more important to the market than the build in crude stocks because I think the crude build could easily be largely reversed next week," said Jim Ritterbusch, president of Ritterbusch and Associates. "We are overdue for a pop in exports."

U.S. crude stockpiles last week rose to their highest level since November 2017 as imports grew, while gasoline inventories posted the steepest drawdown since September 2017, the Energy Information Administration said. inventories USOILC=ECI swelled by 7 million barrels last week, far surpassing forecasts for an increase of 2.3 million barrels. Gasoline stocks USOILG=ECI , however, fell 7.7 million barrels, more than triple the 2-million-barrel drop analysts had expected.

"Even though the crude oil inventory rise was nearly equal in size, the focus of the complex, as we head into peak summer driving season, is gasoline," said John Kilduff, a partner at Again Capital LLC in New York.

U.S. sanctions on oil exporters Iran and Venezuela, as well as supply cuts by the Organization of the Petroleum Exporting Countries (OPEC) and allies including Russia, known as OPEC+, also boosted prices.

"With geopolitical risks continuing to impact production from Venezuela and Iran and now also potentially Libya and even Algeria, the crude oil market is likely to remain supported until the price reaches a level that is satisfactory for OPEC and Russia," said Ole Hansen, commodity strategist at Saxo Bank.

An OPEC monthly report released on Wednesday showed that Venezuela's oil output sank last month to a long-term low below 1 million barrels per day, due to U.S. sanctions and blackouts. figures could add to a debate within OPEC+ about whether to maintain oil supply cuts beyond June. A Russian official indicated this week that Moscow wanted to pump more, although OPEC has been saying the curbs must remain. United Arab Emirates' energy minister said on Wednesday that Russia would not raise its output unless in coordination with the rest of the producer group. led to the resignation of Algeria's veteran president this month, and armed clashes have erupted near the Libyan capital, Tripoli, but political upheaval has yet to impact output in major North African producers.

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