Investing.com - Crude oil prices settled lower Wednesday but recovered most of their losses as risk-off sentiment was offset somewhat by an upbeat weekly report showing a huge draw in U.S. crude supplies.
On the New York Mercantile Exchange crude futures for May delivery fell 14 cents to settle at $63.37 a barrel, while on London's Intercontinental Exchange, Brent lost 14 cents to trade at $67.98 a barrel.
Inventories of U.S. crude fell by 4.617 million barrels for the week ended March 30, confounding expectations for a rise of 1.4 million barrels, according to data from the Energy Information Agency (EIA).
The massive draw in crude stockpiles was supported by increased refinery activity – which tends to raise demand for crude, reducing supplies – as EIA data showed refinery activity rose by 0.07%.
A jump U.S. crude exports to a record also helped cut domestic crude stockpiles. Yet, that was offset by a continued increase in U.S. output, climbing for a sixth straight week to 10.46 million barrels a day, according to data from the Energy Information Administration.
Gasoline inventories – one of the products that crude is refined into – fell by 1.116 million barrels, missing expectations for a decline of 1.264 million barrels, while supplies of distillate – the class of fuels that includes diesel and heating oil – fell by 537,000 barrels, missing expectations for a decline of 1.134 million barrels.
Distillate has made robust start to the year, buoyed by an uptick in distillate demand to its highest since 1979.
“For the first time since 1979, distillate demand during the month of January reached 4.394 million barrels, up about 16% year-on-year and 9% higher than the seasonal 5-year average,” Jefferies said in a report Tuesday, citing data from the Energy Information Administration (EIA).
The upbeat weekly inventory report supported a rebound in crude prices from a session low of $62.08 a barrel as traders remained cautious on risker assets in the wake of recently announced U.S. and China tariffs.