Crude pared losses and ULSD futures turned higher in post-settlement trading after industry group American Petroleum Institute’s data showed crude stocks rose 4.1 million barrels last week, but fell at the Cushing, Oklahoma, hub, while distillate inventories fell 2.6 million barrels.
Earlier this year, Goldman predicted WTI oil could go as low as $20 a barrel. A more accurate snapshot on supplies in storage is scheduled to be released late Wednesday by the U.S. Energy Information Administration.
Brent December futures fell 82 cents to $47.72 a barrel by 1338 GMT, their lowest since mid-September, after settling the previous session down 45 cents.
A Reuters poll of analysts, however, forecast USA crude stockpiles likely rose 3 million barrels last week, rising for a fifth straight week.
That fall set the stage for Wednesday’s rally, a broker and an analyst said.
Any indication rates could be raised in the near term could hit oil prices. Many traders are apt to buy in that environment to protect themselves from a rapid rebound.
With producers facing tightening financing conditions, particularly relative to the first quarter when investors rushed in to the market, the forward production outlook in North America and globally is further diminished.
The swap will allow Mexico to reduce production of fuel oil while obtaining gasoline and diesel for higher value, the company said. O’Brien & Associates LLC. Total motor gasoline supplied (the agency’s measure of consumption) averaged about 9.1 million barrels a day for the past four weeks, up by 3.1% compared with the same period a year ago.
USA crude imports fell last week by 417,000 bpd to 6.5 million bpd.
The EIA’s data showed that big crude oil builds in the Gulf Coast and West Coast regions offset a drop of 2.3 million barrels on the East Coast.
Both markets joined crude’s rally.
The United States Oil ETF (NYSEMKT: USO) traded up about 4.5%, at $14.44 in a 52-week range of $12.37 to $31.450.
WHERE IS OIL GOING: USA oil prices had recovered somewhat after touching six-year lows and briefly dipping under $40 a barrel over the summer.
“The fact that the immediate picture is bearish was confirmed by the latest API statistics”, said Tamas Varga of PVM brokerage.
The oversupply situation in the global oil market is also putting further pressure on oil prices.
The market has been preparing for the return of Iranian oil, which will intensify the global glut as major Organization of Petroleum Exporting Countries have been unwilling to cut output despite shoddy prices, leaving the smaller players pining for countermeasures.
