Crude-oil futures rose Wednesday, responding to the first weekly draw on U.S. oil inventories since January.
Light, sweet crude for May delivery traded 97 cents U.S., or 1.2%, higher at $85.02 U.S. a barrel on the New York Mercantile Exchange. Brent crude on the ICE futures exchange traded 71 cents U.S., or 0.8%, higher at $85.43 U.S. a barrel.
Oil prices had fallen in each of the five previous sessions, largely on fears that oil and gasoline stockpiles are spiraling upward despite an uptick in demand. Crude-oil stockpiles had risen for 10 consecutive weeks, while gasoline inventories were at a 17-year high for early April.
Wednesday's data offered some assurance that inventories could soon reach their upper limit, just in time for fuel demand to undergo its usual summer rise. Oil inventories fell by 2.2 million barrels, where analysts had predicted an increase of 1.1 million barrels in a Dow Jones survey. Gasoline stocks fell by one million barrels, slightly above the 700,000-barrel forecasted decline and contradicting the American Petroleum Institute's report of a build on Tuesday. Distillate stocks, including heating oil and diesel, rose by 1.1 million barrels, more than the expected increase of 600,000 barrels.
With the boost from the surprise oil-stock draw, crude-oil futures are now poised to make another run at $90 U.S. a barrel. The previous attempt stalled out at $87 U.S. a barrel on April 6, leading directly into the recent streak of declines.
The oil market has gradually priced in expectations of improved demand as the economic outlook has brightened, though the weekly figures haven't always supported that view. Wednesday's data provided more fuel for the optimists, as "products supplied," a demand proxy, was up 2.4% from a year earlier in the four weeks ended April 9.
Before the data, some market participants had expressed concern that refiners were boosting fuel production beyond what a slow demand recovery warranted. But gasoline demand reached its highest level since August last week, compensating for a 1.1-percentage-point jump in refinery utilization, to 85.6% of capacity.
Front-month May reformulated gasoline blendstock, or RBOB, recently traded 0.70 cent U.S., or 0.3%, higher at $2.3163 U.S. a gallon. May heating oil traded 1.18 cents U.S., or 0.5%, higher at $2.2260 U.S. a gallon.
