- Crude inventories fell 10 million barrels last week, EIA says
- WTI crude futures lower after earlier rising as much as 3.3%
Oil gave up some of its earlier gains as investors shrugged off a U.S. government report showing declines in U.S. crude, gasoline and distillate stockpiles.
Futures in New York rose 1.2% after touching a one-week high. The Energy Information Administration on Wednesday reported a 10 million-barrel crude draw. Gasoline and distillate stockpiles fell by more than 4 million barrels combined.
“Prices had a knee-jerk reaction based on the data direction and then it calms down,” said Michael Hiley, head of OTC energy trading with LPS Futures. Algorithmic trading may have fueled the initial price rise, he said, adding that the government data was in line with figures reported yesterday by the industry-funded American Petroleum Institute.
Still, the EIA report was constructive for a market concerned about oversupply in the face of demand destruction from the U.S.-China trade war. American crude supplies fell by the most since the week of July 19, sending total stockpiles to the lowest level since October.
“For the rest of the year, we are in good shape on crude inventories,” said Matt Sallee, portfolio manager at Tortoise, a Kansas firm that oversees more than $16 billion in energy assets. “We are sort of out of the woods for crude oversupply at least at this point.”