Futures rose 1.3 percent in New York. U.S. crude inventories jumped 13.8 million barrels last week, the second-biggest gain on record, as imports surged, according to the Energy Information Administration. American stockpiles will begin falling and overseas arrivals will slow amid output curbs by OPEC and other countries, Goldman said in a note.
Oil has fluctuated above $50 a barrel since a deal to trim output between the Organization of Petroleum Exporting Countries and 11 other nations took effect on Jan. 1. U.S. producers are taking advantage of higher prices by increasing output and drilling activity. Crude futures may be in for a jolt as reports from the International Energy Agency and OPEC hit the market Friday and Monday, respectively, offering their first updates on the progress of the cuts.
“The OPEC cut is coming to the fore,” Carl Larry, director of oil and gas at consultant Frost & Sullivan in Houston, said by telephone. “The big stockpile build here will be followed with interest by OPEC. They are serious about higher crude prices and I believe they are ready to pull the trigger on additional action if it’s needed.”
West Texas Intermediate for March delivery rose 66 cents to settle at $53 a barrel on the New York Mercantile Exchange. Total volume traded was 16 percent above the 100-day average at 3:02 p.m.
Brent for April settlement increased 51 cents, or 0.9 percent, to $55.63 a barrel on the London-based ICE Futures Europe exchange. The global benchmark crude closed at a $2.17 premium to April WTI.
Energy companies were among the best performers on the Standard & Poor’s 500 Index. The S&P Oil & Gas Exploration and Production Select Industry index was up 1.8 percent at 3:03 p.m.
U.S. crude production rose by 63,000 barrels a day to 8.98 million a day last week, the EIA reported on Wednesday. Nationwide inventories have increased by almost 30 million barrels since the start of the year. Stockpiles at Cushing, Oklahoma, the delivery point for WTI, climbed for the first time in five weeks.
Gasoline lead gains Wednesday after the EIA showed an unexpected inventory decline. Stockpiles of the fuel dropped 869,000 barrels, the first decrease since December. Gasoline supplied, a measure of demand, jumped 7.6 percent to the highest level this year, after slumping to a two-year low in the week ended Jan. 20.
March gasoline rose 1.1 percent to settle at $1.5702 a gallon. The contract advanced 4.4 percent Wednesday, the biggest gain since November.
“We’ve seen a sea change of sentiment in gasoline,” John Kilduff, a partner at Again Capital LLC, a New York-based hedge fund that focuses on energy, said by telephone. “The market was rattled by weak demand for gasoline, so yesterday’s report came as a relief.”
- The Dakota Access Pipeline could be in service in 83 days, an attorney for Energy Transfer said.
- Suncor Energy Inc.’s output rose to a record last quarter after the oil-sands giant took control of the Syncrude processing unit.
- Total SA raised its dividend and said it may give the go-ahead for almost a dozen new projects in the next 18 months after fourth-quarter profit beat analysts’ estimates.
- China’s independent refiners may directly buy as much as 47.74 million tons of crude oil this year, according to Bloomberg calculations.