Oil prices held onto gains on Wednesday as the weekly US inventory data indicated larger-than-expected drawdowns from supplies of petroleum products.
Futures rose earlier in the day after the message from the Organization of the Petroleum Exporting Countries (OPEC) secretary general, Abdalla El-Badri telling oil markets to stop panicking about oil prices.
Bloomberg quoted El-Badri as having said, “We don’t see really fundamental changes in the supply side or the demand side. Unfortunately everyone is panicking. The press is panicking, consumers are panicking. We really should think and see how this will develop.”
He added, “If the price is declining a lot of the investment will go out of the market. Deep areas, remote areas, many areas will be affected and this includes tight oil.”
Supplies for crude oil climbed 2.1 million barrels in the week that ended October 24, as reported by the US Energy Information Administration on Wednesday.
According to The Wall Street Journal, December delivery light sweet crude traded 85 cents up or 1% to $82.27 per barrel on the New York Mercantile Exchange.
Brent rose $1.12 or 1.3% to $87.15 per barrel on ICE Futures Europe.
Gasoline supplies dropped 1.2 million barrels, higher than the expected decline of 700,000 barrels, the lowest since November 16 2012.
Senior vice president of Herbet J. Sims & Co., Don Morton said, “Gasoline inventories are at a critical level. We have a number of refiners in critical locations that are out.”
November reformulated gasoline blendstock, RBOB, recently climbed 1.4% or 3.1 cents to $2.2271.
Gasoline tends to rise in November and December as drivers travel to shop and for holidays.
The stocks of distillates, including diesel fuel and heating oil dropped 5.3 million barrels. Analysts expected a fall of 1.3 million barrels.
Morton said, “When you look at the total distillate number down over 5 million- that’s shocking.”
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