Investing.com - West Texas Intermediate oil futures pushed higher in volatile trade on Thursday, following the release of weekly U.S. supply data.
Crude oil for delivery in March on the New York Mercantile Exchange tacked on 57 cents, or 2.01%, to trade at $28.92 a barrel by 16:05GMT, or 11:05AM ET. Prices were at around $28.43 prior to the release of the inventory data
The U.S. Energy Information Administration said in its weekly report that crude oil inventories increased by 4.0 million barrels in the week ended January 15. Market analysts' expected a crude-stock rise of 2.8 million barrels, while the American Petroleum Institute late Wednesday reported a supply gain of 4.6 million barrels.
Supplies at Cushing, Oklahoma, the key delivery point for Nymex crude, rose by 191,000 barrels last week, the EIA said.
Total U.S. crude oil inventories stood at 486.5 million barrels as of last week, remaining near levels not seen for this time of year in at least the last 80 years.
Gasoline inventories increased by 4.6 million barrels, compared to expectations for a gain of 1.4 million barrels, while distillate stockpiles decreased by 1.0 million barrels.
A day earlier, the Nymex March contract fell to $27.56 before bouncing back to close at $28.35, down $1.22, or 4.13%. The February contract, which expired at the end of Wednesday’s trading session, sank $1.91, or 6.7%, to settle at $26.55, the lowest since September 2003.
New York-traded oil futures are down nearly 25% since 2016 began as mounting concerns over the strength of the global economy, especially in China, underlined concerns about how quickly the global glut of crude is set to shrink.
Elsewhere, on the ICE Futures Exchange in London, Brent oil for March delivery inched up 68 cents, or 2.55%, to trade at $28.56 a barrel. London-traded Brent prices sank to $27.10 on Wednesday, a level not seen since October 2003.
Brent prices are down almost 26% since the start of the year, as lingering concerns over China’s economic outlook added to the view that a global supply glut may stick around for much longer than anticipated.
Global crude production is outpacing demand following a boom in U.S. shale oil and after a decision by the Organization of the Petroleum Exporting Countries last year not to cut production in order to defend market share.
Oversupply issue will be exacerbated further as Iran plans to return to the global oil market after western-imposed sanctions were lifted earlier this month. Analysts say the country could quickly ramp up exports by around 500,000 barrels, fueling fears over increased supplies amid a global supply glut and slowing demand.
Meanwhile, Brent's discount to the West Texas Intermediate crude contract stood at 36 cents, compared to a gap of 47 cents by close of trade Wednesday.
U.S. crude has been firmer relative to Brent lately, on signs that the U.S. oil market is likely to grow tighter following Congress' decision to lift a 40-year old ban on domestic oil exports, while a global glut gets worse in 2016 due to soaring production in Saudi Arabia and Russia.