The U.S. oil benchmark saw its biggest one-day percentage rise in nearly two months Wednesday as traders looked past a further rise in record crude-oil inventories to focus on a small decline in domestic production and a larger-than-expected drop in gasoline supplies. On the New York Mercantile Exchange, light, sweet crude futures for delivery in May rose $2.49, or 5.2%, to close at $50.09 a barrel, the largest jump since Feb. 3. May Brent crude on London’s ICE Futures exchange rose $1.99, or 3.6%, to settle at $57.10 a barrel.
The U.S. Energy Information Administration said commercial crude-oil inventories, excluding the Strategic Petroleum Reserve, rose 4.8 million barrels in the week ended March 27 to 471.4 million, the highest level in around eight decades and topping forecasts by analysts surveyed by Platts, who had penciled in a 3.5 million barrel rise. But gasoline inventories fell 4.3 million barrels to 229.1 million, exceeding forecasts for a decline of 1.25 million barrels. The drop in gasoline inventories helped ease concerns of a potential oil storage crunch that otherwise runs the danger of putting more supply on the spot market, said Phil Flynn, senior market analyst at Price Futures Group in Chicago. The data raises hopes for stronger demand as refineries end their seasonal maintenance period, he said.
The data also showed a 36,000 barrel-a-day drop in production to 9.386 million barrels, which could be a first step to eventual inventory declines, said Jasper Lawler, market analyst at CMC Markets in London, in a note. Oil prices have fallen for three consecutive quarters. Nymex crude lost 10.6% in the January-March quarter, and has fallen by 55% over the last three quarters, while Brent crude lost 3.9% in the last quarter and has fallen by 51% over the last three quarters.