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U.S. oil futures extend gains after supply data

Published 05/07/2014, 10:42 AM
Updated 05/07/2014, 10:42 AM
WTI oil futures add to gains after U.S. supply report

Investing.com - U.S. oil futures extended gains on Wednesday, after a U.S. government report showed that oil supplies declined unexpectedly last week.

On the New York Mercantile Exchange, West Texas Intermediate crude oil for delivery in June traded at $100.43 a barrel during U.S. morning hours, up 0.93%, or 93 cents. Prices were at $100.13 a barrel prior to the release of the supply data.

Nymex oil rose to a daily high of $100.59 a barrel earlier in the day, the most since April 30. WTI oil inched up 0.02%, or 2 cents, on Tuesday to settle at $99.50.

Futures were likely to find support at $98.91 a barrel, the low from May 5 and resistance at $100.76 a barrel, the high from April 30.

The U.S. Energy Information Administration said in its weekly report that U.S. crude oil inventories declined by 1.8 million barrels in the week ended May 2, compared to expectations for an increase of 1.4 million barrels.

Total U.S. crude oil inventories stood at 397.6 million barrels as of last week.

The report also showed that total motor gasoline inventories increased by 1.6 million barrels, compared to forecasts for a gain of 0.2 million barrels, while distillate stockpiles decreased by 0.4 million barrels, compared to expectations for a gain of 0.9 million barrels.

Meanwhile, Federal Reserve Chair Janet Yellen said earlier that the U.S. economy will rebound in the second quarter as the effects of the harsh winter on growth peter out.

"With the harsh winter behind us, many recent indicators suggest that a rebound in spending and production is already under way, putting the overall economy on track for solid growth in the current quarter," Yellen said in remarks prepared for the Joint Economic Committee of Congress.

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Yellen said she expects growth will expand at a "somewhat faster pace" this year than the 1.9% growth rate seen in 2013. She added that labor market conditions have improved but remain far from satisfactory.

Yellen reiterated that a high degree of monetary accommodation remains warranted given the slack in the economy.

Elsewhere, on the ICE Futures Exchange in London, Brent oil for June delivery shed 0.3%, or 33 cents, to trade at $107.40 a barrel, while the spread between the Brent and U.S. crude contracts stood at $6.97 a barrel.

Russian President Vladimir Putin said he was ready to discuss a way out of the Ukrainian crisis with the head of the Organization for Security and Co-operation in Europe.

His comments come as the conflict between Ukrainian government forces and pro-Russian separatists continued to escalate, stoking fears that the crisis will develop and drag the U.S. deeper into the standoff.

Russia produced 10.4 million barrels of oil per day in 2012 and exported 7.4 million, making it the world’s second largest oil exporter after Saudi Arabia.

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