Investing.com -- Crude futures see-sawed on a volatile day of trading, amid a stronger than expected build in U.S. crude stockpiles last week.
On the New York Mercantile Exchange, WTI crude for November delivery traded in a broad range between $47.77 and $49.70 a barrel before settling at $47.83, down by 0.67 or 1.35% on the day. At one point, Texas Long Sweet futures reached their highest level since July 22. It came one day after crude futures surged approximately 5% following forecasts of increased global demand through the end of next year. Since touching down to six and a half year lows in late August, U.S. crude futures have gained roughly 25% in value.
On the Intercontinental Exchange (ICE), brent crude for November delivery wavered between $51.23 and $53.15 a barrel before closing at $51.45, down 0.47 or 0.83% on the session. The spread between the international and U.S. domestic benchmarks of crude stood at $3.62, above Tuesday's level of $3.35 at the close of trading.
On Wednesday, the U.S. Energy Information Administration (EIA) said in its Weekly Petroleum Status Report that U.S. crude inventories for the week ending on Oct. 2 rose by 3.1 million barrels. Analysts expected a more modest build of 2.2 million barrels for the week. At 461.0 million barrels, U.S. crude oil stockpiles remain near levels not seen for this time of year in at least the last 80 years. For the week, total motor gasoline inventories increased by 1.9 million barrels, while distillate fuel inventories decreased by 2.5 million barrels.
U.S. production, meanwhile, soared by 176,000 barrels per day last week to 9.172 million bpd. A week earlier, crude output nationwide fell below 9.1 million bpd for the first time this year. In June, crude production throughout the U.S. reached its highest level in more than 40 years.
Any supply builds are viewed as bearish for crude, amid a glut of oversupply on energy markets worldwide. Over the last year, crude prices have crashed by more than 50% after OPEC rattled markets last November with its decision to keep its production ceiling above 30 million barrels per day. The tactic triggered an extended battle between the U.S. and Saudi Arabia for market share, sending prices plummeting.
Crude prices surged on Tuesday to monthly highs after the EIA forecasted that global supply next year will rise to 95.98 million bpd, a level 0.1% lower than its estimates in September. In its October Short-Term Energy Outlook, the EIA also said that demand is expected to rise 270,000 bpd to 95.2 million, amid stronger projections for Chinese demand growth. The forecasts represent a 0.3% increase from the EIA's demand projections in September.
In addition, OPEC chief Abdalla Salem el-Badri said he anticipates that global oil investments will fall by approximately $130 billion this year, as a host of OPEC members face substantial deficits due to lower prices. Furthermore, el-Badri expects supply levels to decline in the near future resulting in price rebounds.
The U.S. Dollar Index, which measures the strength of the greenback versus a basket of six other major currencies, inched up 0.10% to 95.62 in U.S. afternoon trading. Dollar-denominated commodities such as crude become more expensive for foreign purchasers when the dollar appreciates.