Investing.com - West Texas Intermediate oil futures held above
the $50-level on Wednesday, but gains were likely to remain limited
amid expectations weekly supply data due later in the session will
show U.S. crude inventories rose to the highest level on record
On the New York Mercantile Exchange, crude oil for delivery in
April advanced 34 cents, or 0.66%, to trade at $50.86 a barrel
during European morning hours.
A day earlier, Nymex
jumped 93 cents, or 1.88%, to settle at $50.52 a barrel after the
American Petroleum Institute, an industry group, said that U.S.
crude inventories rose by 2.9 million barrels in the week ended
February 27, below forecasts for an increase of 4.0 million
The report also showed that gasoline stockpiles rose by 530,000
barrels, while distillate stocks declined by 296,000 barrels.
Wednesday's government report was expected to show that U.S.
crude oil stockpiles rose by 4.2 million barrels last week, while
gasoline stockpiles were forecast to decrease by 1.9 million
According to industry research group Baker Hughes (NYSE:BHI),
the number of rigs drilling for oil in the U.S. fell by 33 last
week to 986, the lowest since June 2011.
The number of oil rigs has declined in 17 of the last 20 weeks
since hitting an all-time high of 1,609 in mid-October.
Market players have been paying close attention to the shrinking
rig count in recent months for signs it will eventually reduce the
glut of crude flowing into the market.
However, U.S. crude supplies are at the highest level in at
least 80 years, indicating that cheap prices have yet to affect
Elsewhere, on the ICE Futures Exchange in London, Brent oil for
April delivery ticked down 42 cents, or 0.69%, to trade at $60.60 a
On Tuesday, London-traded Brent prices rallied $1.48, or 2.49%,
to end at $61.02 a barrel after Saudi Arabia raised the official
selling price for its oil to buyers in the U.S. and Asia.
The sharp increase continued the trend of volatile price
fluctuations, as prices have wavered dramatically over the last
several weeks. Daily oil prices have moved more than 2% in an up or
down direction in 27 of the last 40 trading days.
Meanwhile, the spread between the Brent and the WTI crude
contracts stood at $9.74 a barrel, compared to $10.50 by close of
trade on Tuesday.
Oil prices have fallen sharply in recent months as the
Organization of Petroleum Exporting Countries resisted calls to cut
output, while the U.S. pumped at the fastest pace in more than
three decades, creating a glut in global supplies.
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