By NICOLE FRIEDMAN
Updated Oct. 22, 2015 10:22 a.m. ET
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NEW YORK—Oil prices rose Thursday, snapping a three-day streak of losses, as traders looked past near-term signs of oversupply in the market.
Prices fell to near three-week lows Wednesday after U.S. inventory data showed that supplies grew more than expected. Traders who had bet on lower prices might have closed out those positions Thursday, pushing the market higher.
Light, sweet crude for December delivery recently rose 78 cents, or 1.7%, to $45.98 a barrel on the New York Mercantile Exchange. Brent, the global benchmark, rose 73 cents, or 1.5%, to $48.58 a barrel on ICE Futures Europe.
The U.S. Energy Information Administration reported Wednesday that domestic crude oil inventories expanded by eight million barrels last week, more than analysts surveyed by The Wall Street Journal had expected. Total stockpiles of crude oil and refined products in the U.S. are at an all-time high, adding further pressure to the already oversupplied global market.
The EIA also reported that U.S. production was unchanged from the prior week. Domestic output has started falling in recent months as producers have cut spending in response to low prices. The U.S. currently produces around nine million barrels a day of crude oil, down from 9.6 million barrels a day in April.
”The market continues to shrug off the static factor of huge crude inventories in deference to declining production trends,” said energy-advisory firm Ritterbusch & Associates in a note.The number of rigs drilling for oil in the U.S., which is seen as a proxy for future production, has fallen sharply this year. The rig count for this week is due to be released Friday, and an additional drop in the number of active oil rigs could further boost prices, according to Ritterbusch.
A meeting between members and nonmembers of the Organization of the Petroleum Exporting Countries on Wednesday didn’t produce an agreement about production cuts.
In a bid to defend their market share, OPEC members, and other oil heavyweights like Russia, have refused to trim production, despite the oversupply. The anticipated resumption of Iranian oil exports, most likely later this year, is also exacerbating concerns of a longer global glut and depressed prices.
Gasoline futures recently rose 2.6% to $1.3143 a gallon. Diesel futures rose 1.5% to $1.4723 a gallon.
