(Bloomberg) -- Oil surrendered gains that pushed it to a nine-month high after a closely watched U.S. government report showed smaller-than-expected declines in domestic crude and gasoline stockpiles.
Futures were little changed in New York after earlier climbing above $55 a barrel for the first time since early January. The government’s tally of oil and gasoline held in U.S. storage tanks failed to register withdrawals as large as those reported by the industry-funded American Petroleum Institute on Tuesday.
The federal figures released on Wednesday “came in not quite as strong as API, which was extremely bullish,” Brian Kessens, who helps manage $16 billion in energy assets at Tortoise Capital Advisors LLC, said by telephone.
The 5.2 percent rally in the benchmark U.S. crude grade in October had been largely fueled by the determination of Saudi Arabia, Russia and other major oil producers to extend output curbs well into 2018. While a formal decision to extend the caps may not be made at a Nov. 30 meeting, it’ll come sooner or later, according to PIRA Energy Group, a unit of S&P Global Platts. Meanwhile, overall OPEC production dropped 180,000 barrels a day in October from September to 32.59 million a day, data shows.
West Texas Intermediate crude for December delivery rose 1 cent to $54.39 a barrel at 1:11 p.m. on the New York Mercantile Exchange, after earlier rising to the highest level since Jan. 3, the first trading session of 2017.
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Brent for January settlement slipped 22 cents to $60.72 on the London-based ICE Futures Europe exchange. The international benchmark traded at a premium of $6.09 to January WTI.
The Standard & Poor’s 500 Energy Index rose as much as 1.5 percent to the highest intraday level since April with Devon Energy Corp (NYSE:DVN)., Marathon Oil Corp (NYSE:MRO). and Concho Resources Inc. leading the pack.
U.S. Inventories
Nationwide crude stockpiles slid by 2.44 million barrels last week, while gasoline supplies edged lower by 4.02 million, according to the Energy Information Administration report released Wednesday. The figures were below a 5.09 million barrel drop in crude and a 7.7 million decline in gasoline that the American Petroleum Institute was said to report Tuesday.
Oil inventories at the key Cushing, Oklahoma, pipeline hub ticked higher by 90,000 barrels last week and domestic crude production increased. Distillate supplies slid to levels not seen since 2015 and U.S. crude exports rose for a third week, the EIA data showed.
The crude and gasoline draws weren’t “as big as anticipated. It wasn’t consistent with the API,” James Williams, president of London, Arkansas-based energy researcher WTRG Economics, said by telephone. “We’ve had a strong run in oil prices. It’s time to get a little bit of a pull-back.”
Oil-market news:
- Iraq oil exports from its northern Kurdish region to Turkey fell to 216,000 barrels a day Wednesday, according to port agent information.
- Exxon Mobil Corp (NYSE:XOM).’s Baton Rouge refinery in Louisiana shut five units after an early morning fire in a reformer, according to a person familiar with operations.