The amount of oil in US storage tanks grew by 4.6 million barrels last week, a larger build than expected, the Energy Department said Wednesday. Despite that advance, Wednesday was the first settlement above the key psychological barrier of $US50 since July 31 as booming output from American shale fields countered output cuts by the Organization of Petroleum Exporting Countries and its allies.
OPEC and producers, including Russian Federation, have agreed to reduce output by about 1.8 million barrels per day until March 2018 to reduce global oil inventories and support prices.
Georgi Slavov, the head of research at commodities brokerage Marex Spectron, said he did not expect demand for crude oil to rise significantly in the final quarter of this year, which meant supply would have to be restricted even more tightly. The data suggesting refiners will need to step up crude processing followed robust demand growth forecasts last week from the International Energy Agency and OPEC. OPEC also estimated an increase in demand.
While oil has rebounded the past two weeks, crude in the USA has struggled to hold above $50 a barrel as prices beyond that level make some shale profitable and boost supply.
XAutoplay: On | OffIraqi Oil Minister Jabbar al-Luaibi said Iraq and Ecuador think there should be another 1% cut in production and hinted that others want the cut extended.
Brent crude futures rose 29 cents to $55.43 a barrel, while US West Texas Intermediate crude futures were up 42 cents at $49.90 a barrel, CNBC reported.
At $55.50 a barrel, Benchmark Brent crude was up 3 cents at 2:03 p.m. ET (1803 GMT), in an unstable session that made it stretch from a high of $55.75 a barrel to an intraday low of $54.86. The global benchmark crude traded at a premium of $5.32 to November WTI. "All in all, things are fairly constructive", said Brian Kessens, who helps manage $16 billion in energy assets at Tortoise Capital Advisors.
In New York Mercantile Exchange electronic trading, October West Texas Intermediate crude CLV7, +1.21% the USA benchmark, rose 54 cents, or 1.1%, to push just back above $50 a barrel, trading this week at their highest since the end of July, according to FactSet data.
Although the front-month gasoline futures contract that expires next week settled little changed at $US1.6551 a gallon, later-dated contracts including the more-heavily traded November futures rose.