International Brent crude futures were trading at US$56,96 per barrel in early trading up 15 cents from their last close.
The U.S. Energy Information Administration (EIA) said on Wednesday that gasoline stocks fell by 869,000 barrels last week to 256.2 million barrels, versus analyst expectations for a 1.1 million-barrel gain. However, industry group American Petroleum Institute reported a slightly bigger crude build of 14.3 million barrels on Tuesday, so the EIA data confirmed already lofty expectations. The ongoing rise in United States oil inventories and stronger dollar has negatively affected oil's price movement and outweighed OPEC's output goal.
The company said the oil price needed to be $60 a barrel in order for it to break even, compared with $50-$55 previously. "The breakdown below $52 on WTI could spark a further selloff lower towards $51".
Front-month WTI crude futures now trade at $US53.14 per barrel, up 3.75% from the levels hit earlier this week.
Crude stocks at the Cushing, Oklahoma, delivery hub for USA crude futures USOICC=ECI rose 1.1 million barrels, EIA said.
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Last week's gain pushed US crude inventories "above the upper limit of the average range for this time of year", the EIA said.
"We view imports as the key driver to these large builds and as the simple reflection of the 4Q16 global oil market surplus of more than 0.5 mb/d [million barrels per day]", Courvalin, Banerjee and Mischaikow say. So, what was it that caused oil to move up? This left total inventories minus strategic reserves at 508 million barrels, up some 37 million barrels from this time a year ago. Global oil output was cut by 1,4 million bpd last month, said Russian Energy Minister Alexander Novak. "Healthy gasoline demand eventually translates into higher refinery runs and increasing crude demand". "U.S. shale is coming back, and it's coming back strong".
"Admittedly, U.S. production has also rebounded faster than our rig modeling suggested", the analysts noted.
Iran recently reported that they have set guidance for their production of 4 million bpd by the end of March.
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