Forexpros – Crude oil futures added to gains on Wednesday, climbing to the highest levels of the session as markets took in stride a U.S. government report showing a larger-than-expected increase in U.S. oil supplies last week.
On the New York Mercantile Exchange, light sweet crude futures for delivery in May traded at USD102.19 a barrel during U.S. morning trade, climbing 1.15%.
It earlier rose by as much as 1.3% to trade at a session high of USD102.33 a barrel. Oil futures dropped to as low as USD100.70 a barrel on Tuesday, the lowest since February 14.
Crude prices traded at USD102.77 prior to the release of the Energy Information Administration data.
The U.S. EIA said in its weekly report that U.S. crude oil inventories rose by 2.8 million barrels in the week ended April 6, above expectations for a 2.1 million barrel increase.
U.S. crude supplies surged by 9.0 million barrels in the preceding week. U.S. crude supplies have increased by 18.9 million barrels in the past three weeks, the largest three-week build since January 2009.
But markets blew a sigh of relief as the government report came after a day after the American Petroleum Institute, an industry group, said that U.S. crude inventories soared by 6.58 million barrels last week.
Total U.S. crude oil inventories stood at 365.2 million barrels as of last week, the highest level for this time of year since 1990, underscoring fears over a slowdown in oil demand from the U.S.
Total motor gasoline inventories decreased by 4.3 million barrels, compared to expectations for a 1.3 million barrel decline, after falling by 1.5 million barrels in the preceding week.
The U.S. is the world’s biggest oil-consuming country, responsible for almost 22% of global oil demand.
Prices remained supported as market sentiment firmed up as the yield on Spanish 10-year bonds pulled away from four-month highs hit earlier.
The waning fears boosted the euro to a one-week high against the U.S. dollar, while the dollar index, which tracks the performance of the greenback against a basket of six othrtr major currencies, weakened by 0.23% to trade at 79.86.
Dollar-denominated oil futures contracts tend to rise when the dollar falls, as this makes oil cheaper for buyers in other currencies.
Indications that oil demand from China remains robust provided further support. Offical trade data released Tuesday showed that China’s March imports of crude oil rose 8.7% on the year to 5.55 million barrels per day, off the previous month’s record, but still at their third highest ever.
China is the world’s second largest oil consumer after the U.S. and has been the engine of strengthening demand.
Elsewhere, on the ICE Futures Exchange, Brent oil futures for May delivery added 0.25% to trade at 119.80 a barrel, with the spread between the Brent and crude contracts standing at USD17.61 per barrel.
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