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Oil futures moved up on Wednesday, following a U.S. government report that showed domestic crude supplies up a fourth straight week, but by less than the six million-barrel jump reported by a trade group the day before.
The Energy Information Administration on Wednesday reported that U.S. crude supplies rose by 1.4 million barrels for the week ended Nov. 15. That followed increases in each of the past three weeks.
The latest climb, however, was a bit smaller than the 1.6 million-barrel rise expected by analysts polled by S&P Global Platts. The American Petroleum Institute on Tuesday reported a climb of roughly 6 million barrels.
The EIA crude supply numbers “were basically in line with estimates,” with prices extending gains since they did not come in as high as the large build reported by the API Tuesday, said Tariq Zahir, managing member at Tyche Capital Advisors.
West Texas Intermediate crude for December delivery CLZ19, +2.70% added $1.04, or 1.9%, to trade at $56.29 a barrel on the New York Mercantile Exchange, after settling below its 50-day moving average of $55.59 on Tuesday, according to FactSet data.
The December contract expires at Wednesday’s settlement. Oil for January delivery CLF20, +2.51%, was up $1.19, or 2.2%, at $56.54 a barrel.
January Brent crude BRNF20, +2.33% gained 97 cents, or 1.6%, to $61.88 a barrel on ICE Futures Europe, following its 2.5% decline on Tuesday.
The fourth consecutive weekly rise in crude inventories came “despite a large jump in refining activity,” said Matt Smith, director of commodity research at ClipperData.
“It is the seasonal trend that refinery runs clamber out of fall maintenance at this time of year, hence despite the rise in refinery runs, they remain 420,000 [barrels per day] below year-ago levels,” he told MarketWatch. “Lower flows as a result of the Keystone pipeline outage mean ongoing draws to Cushing [Okla.] inventories, but a rebound in imports and another [Strategic Petroleum Reserve] release has encouraged a modest build on the aggregate.”
The EIA data also showed a supply rise of 1.8 million barrels for gasoline, but distillate stocks fell by 1 million barrels. The S&P Global Platts survey showed expectations for a supply climb of 750,000 barrels for gasoline, while distillates were forecast to fall by 1.4 million barrels
On Nymex, December gasoline RBZ19, +2.49% rose 2.2% to $1.6396 a gallon and December heating oil HOZ19, +1.92% added 1.5% to $1.885 a gallon.
December natural gas NGZ19, +1.55% traded at $2.551 per million British thermal units, up 1.6%.
Both the WTI and Brent crude benchmarks on Tuesday marked their lowest front-month contract settlements since Oct. 31, according to Dow Jones Market Data.
“Tuesday was the worst day for [oil] in five weeks, and followed a 1.16% slide on Monday. [Oil futures are] down 4.8% since posting an almost three month high of 58.09 early on Monday morning,” said Robert Yawger, director of energy at Mizuho Securities USA, in a Wednesday research note.
“The bearish landslide has picked up momentum in the past couple days,” he wrote.
Investors have been downbeat on crude as doubts about a phase-one trade agreement between the U.S. and China, with the Wall Street Journal reporting that talks are hitting an impasse. A resolution on trade is expected to support higher demand for crude because tariff tensions between the world’s largest economies is seen hurting global crowd and appetite for oil.
“All eyes will be on the global macro front whether we see if the phase [one] deal with China can get done,” said Zahir.
Oil prices still trade lower for the week. A report from Reuters Tuesday that said major oil exporter Russia wasn’t likely to advocate for deeper cuts during a key meeting of the Organization of the Petroleum Exporting Countries and non-OPEC members in December.
OPEC is slated to hold its two-day gathering beginning Dec. 5 in Vienna, with its core members and major outside producers like Russia — part of an oil group known as OPEC+.
