Oil futures rounded off their biggest monthly gain since 2009 on Friday as a weekly drop in crude inventories in the country’s storage hub fueled expectations that oil output had peaked and the supply glut would continue to ease.
Light sweet crude for June delivery gained $1.08 or 1.5% to settle at $59.63 a barrel on Thursday on the New York Mercantile Exchange. This is the US benchmark’s highest settlement since December 11.
Prices of the West Texas Intermediate crude contract advanced more than 25% in April- their biggest monthly percentage gain since May 2009.
Brent for June delivery, the global benchmark, traded up 94 cents or 1.4% top $66.78 a barrel on the London Based ICE futures exchange. This is the contract’s highest close since December 9.
Both benchmarks however remain more than 40% below their May 2014 highs.
According to weekly data from the Energy Information Administration, US crude stockpiles rose by a less than expected 1.9 million barrels last week to 490.1 million barrels.
Though the inventories remain at a record high, the growth was less than expected and fed expectations around traders that the current oversupply was going to end with oil production slowing and refineries ramping up activity.
Inventories at Cushing, Okla., an important storage and delivery point for the benchmark Nymex Index, fell for the first time in more than 21 weeks.
“North America remains vastly oversupplied with oil, but storage seems to flatten off at record levels and production is peaking,” Norbert Rücker, head of commodities research at Julius Baer, told the Wall Street Journal
“Both trends should continue.”
Some traders, however, remained skeptical of the oil rally citing weak US economic growth data and indications by Organization of Petroleum Exporting Countries that they were not going to slow output.
“It seems more likely that we will hit some speed bumps on this rally, given the unrelenting OPEC supply and the uneven U.S. economic data, which could cause dollar gyrations,” John Kilduff, partner at New York energy hedge fund Again Capital, told Reuters.
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