Oil advanced after mixed data from the U.S. government, which showed an unexpectedly large jump in crude inventories and a substantial drop in fuel stockpiles.
Futures added 1.3 percent in New York, trading near $57 a barrel. American crude stockpiles last week gained the most since mid-January, more than analysts had expected, yet a larger draw in refined-product inventories helped ease concerns about demand.
Oil has surged more than 25 percent this year as the Organization of Petroleum Exporting Countries and its allies restrain output to balance the market, while sanctions against Venezuela and Iran also keep supplies tight. Despite those bullish factors, the rally has lost steam since mid-February as American crude output hits record highs and investors fret over the U.S.-China trade spat and global growth.
“The market has received a ton of price-supporting news during the past couple of weeks, but without managing to break higher,” said Ole Sloth Hansen, head of commodity strategy at Saxo Bank A/S in Copenhagen. “U.S. inventory developments are more or less in line with the seasonal behavior.”
West Texas Intermediate for April delivery was up 72 cents at $56.94 a barrel on the New York Mercantile Exchange as of 8:11 a.m. local time. Prices lost 34 cents to close at $56.22 on Wednesday.
Brent for May settlement advanced 82 cents to $66.81 a barrel on the London-based ICE Futures Europe exchange. The contract gained 13 cents to settle at $65.99 on Wednesday, rising for a third consecutive session. The global benchmark crude was at a $9.49 premium over WTI for the same month.
The Energy Information Administration said on Wednesday that U.S. crude inventories expanded by 7.07 million barrels last week, exceeding the 1.45 million-barrel increase expected in a Bloomberg survey of analysts. Still, American stockpiles of gasoline, distillates and propane fell by a combined 8.7 million barrels, the EIA data showed.
Meanwhile, President Donald Trump is said to be pushing U.S. negotiators to move closer to a final agreement with China, ending an almost yearlong trade dispute before his re-election campaign begins. As talks advance between the world’s two largest economies, the American president has expressed concern that the lack of a deal could drag down equities, according to people familiar with the matter.
“I’m skeptical about oil’s short-term ability to hold onto current levels,” Hansen said. “The demand outlook may get downgraded, equities are failing to break resistance, and the trade talks are priced in and can only disappoint. Staying long in the belief that Venezuela will deteriorate further is not a healthy bet when global growth is being downgraded.”
Other oil-market news: Chinese travelers are forgoing the open road in favor of trains while making the switch to electric cars, which means the top driver of the world’s oil demand may soon step on the brakes, according to Morgan Stanley. The largest democratic exercise on Earth is set to give the oil market a shot in the arm. About 875 million Indians will go to polls over the next three months to elect their leader. Before they vote, they’ll be courted by a slew of competing political parties — a process that will boost fuel use. Asia more than doubled its intake of American crude oil last year even as Beijing and Washington were embroiled in their bitter trade war.