NEW YORK (MarketWatch) — Oil futures extended gains Wednesday as market participants looked past another rise in crude-oil inventories to focus on signs of stronger-than-expected gasoline demand and talks over Iran’s nuclear program that have stretched beyond a previous deadline.
On the New York Mercantile Exchange, light, sweet crude futures for delivery in May CLK5, +4.22% rose $1.43, or 3%, to $49.04 a gallon. May Brent crude LCOK5, +3.52% on London’s ICE Futures exchange rose $1.37, or 2.5%, to $56.48 a barrel.
The U.S. Energy Information Administration said commercial crude-oil inventories, excluding the Strategic Petroleum Reserve, rose 4.8 million barrels in the week ended March 27 to 471.4 million, the highest level in around eight decades and topping forecasts by analysts surveyed by Platts, who had penciled in a 3.5 million barrel rise.
But gasoline inventories fell 4.3 million barrels to 229.1 million, exceeding forecasts for a decline of 1.25 million barrels.
The drop in gasoline inventories helped ease concerns of a potential oil storage crunch that otherwise runs the danger of putting more supply on the spot market, said Phil Flynn, senior market analyst at Price Futures Group in Chicago.
It raises hopes for stronger demand as refineries end their seasonal maintenance period, he said.
The data also showed a 36,000 barrel-a-day drop in production to 9.386 million barrels, which could be a first step to eventual inventory declines, said Jasper Lawler, market analyst at CMC Markets in London, in a note.
Oil prices have fallen for three consecutive quarters. Nymex crude lost 10.6% in the January-March quarter, and has fallen by 55% over the last three quarters, while Brent crude lost 3.9% in the last quarter and has fallen by 51% over the last three quarters.
Nymex reformulated gasoline blendstock for May RBK5, +3.51% —the benchmark gasoline contract—rose 5.45 cents, or 3.1%, to $1.8245 a gallon.
May natural gas futures NGK15, -1.33% fell more than 3 cents, or 1.2%, to $2.609 per million British thermal units.
