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WTI oil futures trim gains as crude stocks rise by 2.8M barrels

Published 2016-05-04, 10:35 a/m
© Reuters.  WTI oil futures trim gains after weekly supply data
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Investing.com - West Texas Intermediate oil futures came off the highest levels of the session in North America trade on Wednesday, after data showed that oil supplies in the U.S. rose more than feared last week.

Crude oil for June delivery on the New York Mercantile Exchange tacked on 62 cents, or 1.42%, to trade at $44.27 a barrel by 14:35GMT, or 10:35AM ET. Prices were at around $44.58 prior to the release of the inventory data after climbing to a daily peak of $44.87.

The U.S. Energy Information Administration said in its weekly report that crude oil inventories rose by 2.8 million barrels in the week ended April 29. Market analysts' expected a crude-stock rise of 1.7 million barrels, while the American Petroleum Institute late Tuesday reported a supply gain of 1.3 million barrels.

Supplies at Cushing, Oklahoma, the key delivery point for Nymex crude, rose by 243,000 barrels last week, the EIA said. Total U.S. crude oil inventories stood at 543.4 million barrels as of last week, the highest levels on record.

The report also showed that gasoline inventories increased by 0.5 million barrels, compared to expectations for a drop of 0.2 million barrels, while distillate stockpiles fell by 1.3 million barrels.

A day earlier, Nymex prices lost $1.13, or 2.52%, as worries about global growth resurfaced. Nymex oil prices are up nearly 50% since falling to 13-year lows at $26.05 in February, as a decline in U.S. shale production boosted sentiment. However, analysts warned that market conditions remained weak due to an ongoing glut.

Elsewhere, on the ICE Futures Exchange in London, Brent oil for July delivery rose 30 cents, or 0.67%, to trade at $45.27 a barrel after falling 86 cents, or 1.88%, on Tuesday as indications of increased production from the Organization of the Petroleum Exporting Countries dampened sentiment.

Brent futures prices are up by roughly 45% since briefly dropping below $30 a barrel in mid-February, despite the collapse of talks at a Doha summit in April aimed at achieving a production freeze among OPEC and Non-OPEC producers. OPEC meets on June 2 in Vienna and may discuss the freeze initiative again.

Meanwhile, Brent's premium to the WTI crude contract stood at $1.00 a barrel, compared to a gap of $1.32 by close of trade on Tuesday.

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