Oil traded higher on Wednesday’s session following the released data from the U.S. government showing a strengthened refining activity in the country, along with a drop in domestic crude stockpiles. Investors anticipate the meeting of largest oil producers next week.
Crude stockpiles in the U.S. were 1.8 million barrels short in the week until May 12, much lower than the expected 2.4 million barrels. However, the news of a draw made the prices higher that had later fell last Tuesday’s session after the American Petroleum Institute announced a build in crude. Meanwhile crude output on the stateside jumped as much as 10 percent since last year to 9.3 million barrels per day (bpd).
Again Capital LLC’s partner at energy hedge fund John Kilduff said that the decline in crude stocks may have upset some, but the refinery usage’s large rise foreshadows well for the demand of crude oil in the future weeks. Regardless of the imports, refinery runs over 750,000 bpd, higher than the levels last 2016 enough to initiate a build. This makes the U.S. Golf Coast responsible for the growth of refinery activities, ClipperData’s director of commodity research Matt Smith says.
U.S. crude stocks experienced a six-week streak drawdown, according to the Energy Information Administration (EIA). Distillate and gasoline stockpiles were also lower. On Wednesday’s session, International benchmark Brent crude added 45 cents at $52.10 a barrel, while U.S. West Texas Intermediate crude also advanced 41 cents at $49.07 a barrel.
Both WTI and Brent already edged higher last Monday by $49.66 and $52.63 accordingly following the agreement of Russia and Saudi Arabia on prolonging the productions cuts by OPEC member and other nations. Moscow and Riyadh said the extension should last until March. The OPEC meeting is set to be debated this May 25.