Oil prices rose further on Thursday after a U.S. report showed a draw in gasoline inventories and a much smaller-than-anticipated rise in crude stocks.
U.S. gasoline stockpiles USOILG=ECI fell by about 2 million barrels in the week to Feb. 14, while analysts had estimated an increase of 435,000 barrels, according to data from the U.S. Energy Information Administration (EIA).
The EIA data also showed crude inventories USOILC=ECI rose only 414,000 barrels last week, compared with expectations of a 2.5 million barrel rise from analysts in a Reuters poll. [EIA/S]
Brent crude futures LCOc1 were up 76 cents, or 1.29%, at $59.88 a barrel by 11:07 a.m. ET (1603 GMT).
The front-month U.S. West Texas Intermediate (WTI) crude CLc1 futures contract, which expires Thursday, gained 99 cents, or 1.86%, to $54.28 a barrel. The more-active second-month WTI benchmark CLc2 was up 95 cents, or 1.74%, at $54.44 a barrel.
China’s move to cut its benchmark lending rate on Thursday also helped to ease worries about slowing demand in the world’s second-biggest oil consumer and largest crude oil importer.
China reported 349 new confirmed coronavirus cases in Hubei province on Wednesday, the lowest in more than three weeks, while the death toll rose by 108, down from an increase of 132 the previous day.
Oil also found some support from U.S. sanctions this week on a trading unit of Russian oil giant Rosneft for its ties with Venezuela’s state-run PDVSA in a move that could choke the OPEC member’s crude exports even further.
At the same time, the conflict in Libya that has led to a blockade of its ports and oilfields shows no signs of resolution.
The more than month-long shutdowns in Libya have reduced the OPEC member’s crude production by more than 1 million barrels per day (bpd).
Brent crude could extend gains to $60.22 a barrel, as suggested by its wave pattern and a projection analysis, said Reuters technical analyst Wang Tao.
Brent crude futures for nearby delivery were also trading at a premium to future months, a structure called backwardation, signalling a potential tightening in supplies from a surge in demand as fears about the impact of the coronavirus subside and following tighter U.S. sanctions on Venezuelan exports.
American Petroleum Institute data on Wednesday showed a bigger than expected build in crude oil inventories.
U.S. crude stocks rose by 4.16 million barrels in the week to Feb. 14, while gasoline stocks fell by 2.7 million barrels, the industry group’s data showed.