WTI oil futures extend gains after weekly U.S. supply data

Investing.com - West Texas Intermediate oil futures rose to the highest levels of the session on Wednesday, after data showed that oil supplies in the U.S. rose less than expected last week.

On the New York Mercantile Exchange, crude oil for June delivery tacked on 80 cents, or 1.4%, to trade at $57.86 a barrel during U.S. morning hours. Prices were at around $57.36 prior to the release of the inventory data.

The U.S. Energy Information Administration said in its weekly report that U.S. crude oil inventories rose by 1.9 million barrels in the week ended April 24, below expectations for an increase of 2.3 million barrels.

Total U.S. crude oil inventories stood at 490.9 million barrels as of last week, the most in at least 80 years, even as drilling activity fell.

The report also showed that total motor gasoline inventories increased by 1.7 million barrels, compared to expectations for a gain of 0.3 million, while distillate stockpiles fell by 0.1 million barrels.

U.S. oil futures have risen almost 15% in April due to mounting expectations that U.S. shale oil production has peaked and may start falling in the coming months amid an ongoing collapse in rigs drilling for oil.

According to industry research group Baker Hughes (NYSE:BHI), the number of rigs drilling for oil in the U.S. fell by 31 last week to 703, the lowest since October 2010. It was the 20th straight week of declines.

Market players have been paying close attention to the shrinking rig count in recent months for signs it will eventually reduce the glut of crude flowing into the market.

Elsewhere, on the ICE Futures Exchange in London, Brent oil for June delivery rose 50 cents, or 0.77%, to trade at $65.14 a barrel. On Tuesday, London-traded Brent futures declined 19 cents, or 0.29%, to close at $64.64.

Brent futures are up more than 15% so far in April as some investors bet that a bottom had been reached after a nine-month long rout. But prices are still down approximately 43% since June, when futures climbed near $116.

The spread between the Brent and the WTI crude contracts stood at $7.28 a barrel, compared to $7.58 by close of trade on Tuesday.

Meanwhile, the Commerce Department reported that the U.S. economy grew just 0.2% in the three months to March, slowing from 2.2% in the final quarter of 2014. It was the slowest rate of growth in a year. The consensus forecast among economists was for a more moderate slowdown to 1.0%.

Consumer spending, which accounts for approximately 70% of U.S. economic activity, slowed to 1.9% in the first three months of this year, down sharply from 4.4% in the fourth quarter.

The data came as investors were looking ahead to the Federal Reserve’s rate statement later in the day for further indications on the timing of a first rate increase.

Recent disappointing economic reports have prompted investors to push back expectations for an initial rate hike to later in the year from midyear.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was last down 1.2% to 95.04, the weakest since March 18.