Oil Edges Higher to End Turbulent Trading Week
(Bloomberg) — Even a minuscule decline in U.S. stockpiles was enough to give oil prices a boost after a turbulent week of trading.
Futures in New York rose after the Energy Information Administration reported that U.S. crude inventories fell by 46,000 barrels last week, the smallest decrease since 2011. The decline was viewed positively following the American Petroleum Institute’s reported 6.92 million-barrel crude build on Thursday. Still, crude posted a third consecutive weekly loss.
Meanwhile, gasoline stockpiles rose by the most since June, while crude production also increased, keeping price rallies limited.
“We were expecting a pretty meaningful build,” so even though the stockpile decline was small, “it was a bit of a relief for the market,” said Brian Kessens, who helps manage $16 billion in energy assets at Tortoise in Leawood, Kansas. “Oil is largely just trading with the broader market sentiment and a little less on the fundamentals.”
Crude oil and the equity market have swung between large gains and steep losses this week as uncertainty persists over the global economy and turmoil in Washington carries on. Oil is on track for its worst quarterly loss since 2014 amid global growth fears and doubts over the effectiveness of OPEC’s production-cut agreement.
“I can see a couple more draws coming due to tax maneuvering,” said Ashley Petersen, an oil analyst at Stratas Advisors LLC in New York. “It’s good to see the market coming to its senses and entering a bit more of a wait-and-see mode.”
West Texas Intermediate crude for February added 72 cents to settle at $45.33 a barrel on the New York Mercantile Exchange. Total volume traded Friday was 18 percent below the 100-day average. Futures posted a 0.6 percent weekly decline.
Brent for February settlement rose 4 cents in its last trading session before expiry, closing at $52.20 a barrel on London’s ICE Futures Europe exchange. The more active March contract added 48 cents to $53.21.
The EIA data also showed gasoline stockpiles climbed by about 3 million barrels last week and crude production jumped to 11.7 million barrels a day. Distillate inventories rose by 2,000 barrels.
Other oil market news: Gasoline futures rose 1.7 percent to settle at $1.3262 a gallon. Physical oil markets need to show signs of improvement before flat prices can start to rally, according to the founders of hedging advisory company Commodities Trading Corporation.
With assistance from Tsuyoshi Inajima and Grant Smith. To contact the reporter on this story: Jessica Summers in New York at firstname.lastname@example.org. To contact the editors responsible for this story: David Marino at email@example.com Catherine Traywick, Carlos Caminada.