Oil futures climbed more than one per cent overnight after US data showing a deep decline in petrol stocks overrode a rise in crude inventories to 17-month highs, and as an OPEC report showed further tightening of Venezuela’s crude supply.
International benchmark Brent futures settled at $US71.73 a barrel, gaining $US1.12, or 1.59 percent, after hitting a five-month high of $71.78 a barrel.
US West Texas Intermediate (WTI) crude oil futures settled at $US64.61 a barrel, rising 63 US cents, or 0.98 per cent, holding just below its strongest level since mid-November.
“At the end of the day, that big gasoline stock draw was more important to the market than the build in crude stocks because I think the crude build could easily be largely reversed next week,” said Jim Ritterbusch, president of Ritterbusch and Associates.
“We are overdue for a pop in exports.”
US crude stockpiles last week rose to their highest level since November 2017 as imports grew, while gasoline inventories posted the steepest drawdown since September 2017, the Energy Information Administration said.
Crude inventories swelled by 7 million barrels last week, far surpassing forecasts for an increase of 2.3 million barrels.
Petrol stocks, however, fell 7.7 million barrels, more than triple the 2-million-barrel drop analysts had expected.
“Even though the crude oil inventory rise was nearly equal in size, the focus of the complex, as we head into peak summer driving season, is gasoline,” said John Kilduff, a partner at Again Capital LLC in New York.
US sanctions on oil exporters Iran and Venezuela, as well as supply cuts by the Organisation of the Petroleum Exporting Countries (OPEC) and allies including Russia, known as OPEC+, also boosted prices.
“With geopolitical risks continuing to impact production from Venezuela and Iran and now also potentially Libya and even Algeria, the crude oil market is likely to remain supported until the price reaches a level that is satisfactory for OPEC and Russia,” said Ole Hansen, commodity strategist at Saxo Bank.
An OPEC monthly report released on Wednesday showed that Venezuela’s oil output sank last month to a long-term low below 1 million barrels per day, due to US sanctions and blackouts.
The figures could add to a debate within OPEC+ about whether to maintain oil supply cuts beyond June.
A Russian official indicated this week that Moscow wanted to pump more, although OPEC has been saying the curbs must remain.
However, United Arab Emirates’ energy minister said on Wednesday that Russia would not raise its output unless in co-ordination with the rest of the producer group.
Protests led to the resignation of Algeria’s veteran president this month, and armed clashes have erupted near the Libyan capital Tripoli but political upheaval has yet to affect output in the major North African producers.