By Barani Krishnan and Liz Moyer
Investing.com - Oil prices edged higher on Wednesday after the trade focused more on the tumble in weekly crude stockpiles than the surge in inventories of fuel products such as gasoline and diesel that pointed to tepid seasonal demand for energy.
“Both the supply and demand equations had their sway on today’s action and the market chose to go with one, though that doesn’t mean the volatility we’ve seen in recent days is over,” said John Kilduff, partner at New York energy hedge fund Again Capital.
New York-traded West Texas Intermediate, the benchmark for U.S. crude, settled up 10 cents, or 0.2%, at $59.43 per barrel. WTI traded in a wide range of nearly $2 a barrel for the day, moving between an intraday low of $58.12 and high of $60.04.
London-traded Brent, the global benchmark for crude, settled up 42 cents, or 0.7%, at $63.16. Brent also moved within a band of nearly $2, hitting a session low of $61.60 and peak of $63.50.
Crude inventories declined 3.522 million barrels last week, compared with analysts' expectations for a draw of 1.436 million barrels, the Energy Information Administration said in its Weekly Petroleum Status Report.
But gasoline inventories rose 4.044 million barrels last week, compared with expectations for a draw of 221,000 barrels, the EIA said.
Distillate stockpiles, which include diesel and heating oil, rose 1.452 million barrels against expectations for a build of 486,000 barrels.
More surprising was the EIA’s downward revision of production estimates for U.S. crude, which it put at 10.9 million barrels for last week versus the previous week’s 11.1 million bpd.
That revision did not jive with the steady climb in the U.S. oil rig count seen since mid-September.
The rig count, an indicator of future production, stood at 337 during the week to April 1, nearly double from the August record low of 172.
“There’s no valid reason that I can see for this 200,000 bpd slash in production estimates, and I’m almost certain that the EIA is going to wind up the number again in the coming week,” said Kilduff.