MW: Oil futures rise above $70 a barrel after API supply data
Crude stocks at a key delivery point unexpectedly decline, the API says
By Polya Lesova, MarketWatch
FRANKFURT (MarketWatch) -- Oil futures rallied above $70 a barrel on Wednesday, after data showed a decline in inventories at a key delivery point and stock futures pointed to opening gains on Wall Street.
Crude oil for July delivery gained $1.97, or nearly 3%, to $70.73 a barrel in electronic trading on Globex. It hit an intraday high of $70.93 a barrel.
The contract rebounded after ending down 2.1% on Tuesday.
"The American Petroleum Institute reported yesterday evening that U.S. crude oil stocks at Cushing decreased last week for the first time in seven weeks, raising hopes of an end to stock-building," wrote analysts at Commerzbank AG in a note.
Cushing, Okla., is the main delivery point for West Texas Intermediate crude oil traded on the New York Mercantile Exchange. Stocks at Cushing dropped by 772,000 barrels last week to stand at 37.2 million barrels, the API reported late Tuesday.
Gasoline stocks declined by 3.19 million barrels, API data showed, further boosting hopes of a recovery in energy demand.
The U.S. Energy Information Administration will report its more closely watched data on inventories at 10:30 a.m. Eastern.
Analysts polled by Platts expect a rise of 100,000 barrels in crude stocks, but the focus will be on the level of inventories at Cushing. Gasoline stocks are projected to rise by 150,000 barrels and distillates stocks by 200,000 barrels, according to the Platts survey of analysts.
"A recovery in the global equity markets and a drop in crude-oil stocks at Cushing could spread signs of optimism across the energy market and could drive oil prices back to the previous range of $70-$75 per barrel," said Myrto Sokou, analyst at Sucden Financial Research, in a note.
European stocks posted strong gains and U.S. stock futures also rose, as traders awaited data on durable-goods orders and new-home sales.
In the currency markets, the euro (CUR_EURUSD 1.2277, -0.0095, -0.7679%) was once again under selling pressure. It fell 0.4% to $1.2311.
