West Texas Intermediate crude gave back some of its daily gains after the Energy Information Administration reported a much-larger-than-expected increase in US crude oil inventories in the seven days through April 11th, the 12th rise in 13 weeks. Strong industrial production data from the US, however, coupled with rising tensions in Ukraine provided the market with solid support and limited downside movement.
On the New York Mercantile Exchange, WTI crude for delivery in May traded at $104.18 per barrel at 14:56 GMT, up 0.41% on the day. Prices shifted in a daily range between days high of $104.99, the strongest level since March 3, and $103.68 a barrel. The American benchmark crude lost 0.3% on Tuesday to close the session at $103.75 a barrel.
Meanwhile on the ICE, Brent futures for settlement in June were up 0.57% to trade at $110.98 a barrel. The European crude benchmark surged to $110.36 a barrel earlier in the day, the highest since early March, and widened its premium to its US counterpart for delivery in the same month to $6.57, up from Tuesdays close at $6.36.
US crude pared some of its gains after the Energy Information Administration reported that US crude oil supplies jumped by 10.0 million barrels to 394.1 million in the week ended April 11th, sharply exceeding the median estimate of analysts surveyed by Bloomberg for a moderate 1.75-million-barrel jump.
US crude imports surged to 8.3 million barrels per day, up by 959 000 barrels from the previous week. Over the last four weeks, crude oil imports averaged 7.5 million barrels per day, 3.9% below the same four-week period last year.
US crude production rose by 72 000 barrels per day to 8.3 million bpd, the highest since April 1988.
Pressure however was limited as the agencys report also showed that inventories at Cushing, Oklahoma, the biggest US storage hub and delivery points for NYMEX-traded contracts, slid by 771 000 barrels to 26.8 million, the lowest level since October 2009.
Refinery utilization rate picked up last week. Refineries operated at 88.8% of their operable capacity, the highest since January 10th, up 1.3% from a week earlier. Motor gasoline production declined, while distillate fuel output increased, averaging 8.9 million and 4.9 million barrels per day, respectively.
Total motor gasoline inventories decreased by a mere 0.15 million barrels to 210.3 million, underperforming analysts expectations for a 1.75-million decline. Distillate fuel inventories, which include diesel and heating oil, slid by 1.28 million barrels to 111.9 million, defying projections to have remained unchanged.
The oil market gained support earlier in the day after the Federal Reserves industrial output figures for March were better-than-expected and marked a 0.7% increase, beating forecasts of a 0.5% growth, recording a second straight month of expansion. Also, February’s figure was revised from a 0.6% to show a 1.2% growth – the highest in 5 months, indicating a strong industrial period for the US. Weaker-than-expected housing data failed to reverse previously built up positive sentiment of a robust economic recovery in the US.
Prices also remained underpinned near 6-week-high levels as tensions in east Ukraine escalated after Ukrainian forces began a military crackdown against pro-Russian separatists in the eastern regions of the country on Tuesday. The so-called ”anti-terrorist” operation is the central government’s response to armed militants taking control of administrative and police buildings in the East. Earlier, the local parliaments of the Donetsk and Lugansk regions elected the creation of independent, sovereign states, and called for referendums on ceding from Ukraine, much like the events in the Crimea.
TradingPedia.com is a financial media specialized in providing daily news and education covering Forex, equities and commodities. Our academies for traders cover 
