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US Crude Rises Amid Jump in Supplies, Drop in Gasoline Inventories

Summary:
Crude oil futures are rallying midweek after the US government reported a more-than-expected increase in domestic inventories and an immense decline in gasoline supplies. Investors are also concentrating on the Organization of the Petroleum Exporting Countries (OPEC) and focusing on sanctions affecting major oil-producing markets. May West Texas Intermediate (WTI) crude futures surged %excerpt%.50, or 0.78%, to .48 per barrel at 19:39 GMT on Wednesday on the New York Mercantile Exchange. US crude prices continue their impressive 2019 performance, advancing nearly 40% year-to-date, with a third of those gains coming in the last month. Brent, the international benchmark for oil prices, is also soaring in the middle of the trading week. June Brent crude futures added .05, or 1.49%, to .66

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Crude oil futures are rallying midweek after the US government reported a more-than-expected increase in domestic inventories and an immense decline in gasoline supplies. Investors are also concentrating on the Organization of the Petroleum Exporting Countries (OPEC) and focusing on sanctions affecting major oil-producing markets.

May West Texas Intermediate (WTI) crude futures surged $0.50, or 0.78%, to $64.48 per barrel at 19:39 GMT on Wednesday on the New York Mercantile Exchange. US crude prices continue their impressive 2019 performance, advancing nearly 40% year-to-date, with a third of those gains coming in the last month.

Brent, the international benchmark for oil prices, is also soaring in the middle of the trading week. June Brent crude futures added $1.05, or 1.49%, to $71.66 a barrel on London’s ICE Futures exchange. Like its US counterpart, Brent has climbed more than 30% so far this year.

According to the US Energy Information Administration (EIA), domestic stockpiles rose by seven million barrels for the week ending April 5, which is higher than the median estimate of 2.8 million barrels. Gasoline inventories plunged by 7.7 million barrels, while distillate supplies tumbled by 100,000 barrels.

This comes one week after oil stockpiles climbed to their highest levels since November 2017, while gasoline supplies recorded their biggest drawdown since September 2017.

The US Baker Hughes total oil rig count came in at 831, up from the previous week’s 816.

Crude found support from US sanctions on Iran and Venezuela, two of the largest oil producers in the world, and OPEC slashing output to maintain higher prices. Last month, OPEC inventories declined to a four-year low, falling by 500,000 barrels per day (bpd) in an effort to curb output – Caracas and Tehran are exempted from the cartel agreement.

Ultimately, the international oil market is benefiting from voluntary and involuntarily supply cuts.

However, crude investors were surprised by reports that Russia might be attempting to raise production levels in the coming months, according to a senior Russian official who spoke on the condition anonymity. These concerns were diminished after President Vladimir Putin confirmed on Tuesday that the current prices suited Moscow – most foreign markets rely on $60 to remain profitable, compared to the $40 in the US.

In other energy commodities, May natural gas futures were flat at $2.70 per million British thermal units (btu). May gasoline futures soared $0.06, or 3.01%, to $2.05 a gallon. May heating oil futures tacked on $0.036, or 1.79%, to $2.081 per gallon.

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Andrew Moran
I am a full-time professional writer. Prior to my self-employment, I worked as a reporter for Digital Journal covering the politics beat and The Toronto Times reporting on the city’s entertainment scene. I currently write mostly about business, marketing and finance

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