Oil prices jumped to a fresh 2015 high after weekly supply data showed an unexpected drop in domestic stockpiles, an indicator that the oil glut could ease in the long term.
The US Energy Information Administration said that US crude stockpiles dropped by 3.8 million barrels last week. This is the first drop in more than 17 weeks.
Inventories at Cushing, Okla., an important storage and delivery point for the US benchmark Nymex contract, fell for the second straight time to 61.7 million barrels- a 12,000 barrel drop.
“A lot of what was in the report was already built in,” Tom Finlon, Jupiter, Florida-based director of Energy Analytics Group LLC, told Bloomberg by phone.
“Cushing supplies were largely unchanged in the face of a nearly 2 percent climb in refinery runs. That’s not much of a reaction.”
Also aiding the rally was weakness in the dollar against other currencies after the ADP released private employment data showing that private employers added fewer jobs that expected in April.
A weaker dollar is bullish for crude demand as it makes it affordable to holders of other currencies.
Light sweet crude for June delivery advanced by 81 cents or 1.3% to $61.21 a barrel on the New York Mercantile Exchange- the highest it has been since December 10.
The US benchmark climbed above $62 a barrel immediately after the inventory data but still held on to record fresh highs for the year.
Brent for June delivery climbed by 66% or 1% to $68.16 a barrel on the London-based ICE futures Exchange. The global benchmark had earlier risen above $69.13-the highest since December 5- but held on after paring gains to remain positive for the day.
“The sharp decline in crude-oil inventories comes on the back of a reported oil port closing in Libya,” Tim Evans, chief market strategist at Long Leaf Trading Group, told Market Watch.
“We also have a rapidly falling U.S. dollar DXY, -1.11% following the release of the disappointing ADP number,” he said. “The fundamentals and macroeconomic picture are supporting a continued push higher, leaving $60 as key support from here for Nymex oil.”
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