Crude futures turned higher Wednesday after U.S. oil stockpiles posted their biggest weekly decline in eight years.
Crude inventories fell by 9.9 million barrels in the week ended Dec. 10, according to a report from the U.S. Department of Energy, a much larger drop than the 2.7-million-barrel decline analysts had expected. Total U.S. crude and fuel stockpiles fell to the lowest level since November 2008, due in part to a sizable drop in imports.
Light, sweet crude for January delivery recently traded 68 cents U.S., or 0.8%, higher at $88.96 U.S. a barrel on the New York Mercantile Exchange after trading as low as $86.83 U.S. earlier in the session. Brent crude on the ICE futures exchange traded $1.09 U.S. higher at $92.30 U.S. a barrel.
Oil futures have wavered just below $90 U.S. a barrel for the past week after a rally led prices to briefly top the key level. Many analysts have pointed to falling global supplies as the impetus for the rise, with several banks joining a chorus calling for $100 U.S. a barrel oil next year.
Declines in U.S. inventories have lagged drops around the world, some analysts say.
Nevertheless, the supply situation has made traders wary of pushing prices higher until stocks fall in the world's largest oil consumer.
Oil products saw modest inventory increases. Gasoline stockpiles rose by 800,000 barrels, while stocks of distillates, which include heating oil and diesel, rose by 1.1 million barrels.
Analysts had expected gasoline stocks would rise by 1.9 million barrels, and called for a 200,000-barrel drop in distillates.
Still, a drop in imports accounted for a large portion of the stockpile declines. Refineries in the Gulf Coast region have been cutting their stockpiles as the year ends in order to lower their state-tax burdens.
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