By Barani Krishnan
Investing.com - Oil prices rose Wednesday as supportive U.S. inventory data and the Biden administration’s warning that Russia could still invade Ukraine helped pull the market back from its sharpest slump for the year in the previous session.
New York-traded West Texas Intermediate, the benchmark for U.S. crude, was up $1.34, or 1.5%, at $93.41 per barrel by 2:16 PM ET (19:16 GMT). The intraday peak for WTI was $95, versus Tuesday’s low of $91.64.
London-traded Brent, the global benchmark for oil, was up $1.40, or 1.5%, at $94.68, after a session high at $96.03. Brent fell to as low as $92.06 in the previous session.
Stockpiles of U.S. crude oil rose for the first time in three weeks while gasoline inventories fell for a second week in a row in a mixed trend for energy consumption in an economy virtually free of coronavirus concerns, government data showed on Wednesday.
Crude stockpiles rose by 1.12 million barrels last week, after declines of 4.76 million and 1.05 million respectively in preceding weeks, the Energy Information Administration, or EIA, said in its Weekly Petroleum Status Report.
Gasoline inventories, meanwhile, fell by 1.33 million, adding to the prior week’s drop of 1.64 million.
Gasoline is America’s premier fuel product. Inventories of the fuel had ballooned throughout January as refiners appeared to be maximizing fuel processing ahead of scheduled plant maintenance in March. Escalating winter temperatures in January also typically lead to less driving among Americans.
Analysts polled by U.S. media had forecast a drawdown of 1.57 million barrels of crude and a build of 550,000 barrels of gasoline on the average for last week.
{{ecl-917||Distillate stockpiles}, meanwhile, fell 1.55 million barrels last week, continuing their decline for a fifth week in a row. Distillates are refined into diesel for trucks, buses, trains and ships as well as fuel for jets.
“The early stages of post-COVID shows a mixed trend for energy consumption, with a slight bias towards the bullish side,” said John Kilduff, founding partner at New York energy hedge fund Again Capital.
He cited the continuous drops in weekly deposits at the Cushing, Okla., base for crude storage as a factor that tilted the market towards the bullish side. Cushing's importance to the market has waned in recent years as producers send more inventories to the U.S. Gulf for export, but it is still notable as it is the delivery point for U.S. crude futures.
Exports of crude oil fell sharply last week to 2.27 million from 3.1 million in the prior week. Refinery utilization, meanwhile, fell by almost 2% last week to 85.3%.
Questions about the demand for oil had cropped up in recent weeks as EIA data showed little reductions in crude stocks and a jump instead in gasoline inventories — despite a plunge in cases and hospital admissions for Covid-19 nationwide that would have typically led to more mobility and economic activity.
On the Russian front, the United States reiterated its warning that Moscow could invade Ukraine "any day." Secretary of State Antony Blinken told ABC News that Washington has seen "no meaningful pullback" of the Kremlin’s forces situated outside Ukraine’s borders, and that Russian President Vladimir Putin could "pull the trigger" at any point.
Putin has denied any invasion plans, demanding instead that the U.S. and NATO bar Ukraine from joining the non-aligned treaty — a prospect he said could weaken Moscow’s own security.