Oil rose in New York, trading near a five-month high, after industry data indicated a sharp decline in American gasoline inventories last week.
West Texas Intermediate crude futures increased 0.7 percent, while gasoline climbed as much as 1.7 percent to the highest since October. The American Petroleum Institute was said to report on Tuesday that gasoline stockpiles fell by 7.08 million barrels. That may change expectations for more comprehensive government data due later Wednesday, which had been forecast to show a smaller drop.
“The API reported much bigger drawdowns in product than expected,” said Warren Patterson, senior commodities strategist at ING Bank NV.
Oil has climbed more than 40 percent in New York this year as the Organization of Petroleum Exporting Countries has reduced production to prevent a global surplus, and as the group’s supplies are further curbed or threatened by political troubles in members Venezuela, Iran and -- most recently -- Libya.
But the gains remain capped by fears over the strength of the world economy, which the International Monetary Fund predicts will see its weakest growth this year since the financial crisis.
West Texas Intermediate for May delivery climbed 36 cents, or 0.6 percent, to $64.34 a barrel on the New York Mercantile Exchange as of 8:39 a.m. local time. The settlement price of $64.40 on April 8 was the highest closing level since Oct. 31. Prices remain above the 200-day moving average after they breached that level for the first time since October earlier this month.
Brent for June settlement rose 14 cents to $70.75 a barrel on the London-based ICE Futures Europe exchange. The global benchmark crude was at a premium of $6.49 to WTI for the same month.
Gasoline’s boost to the market may be short-lived, however, as the inventory pullback has more to do with “low U.S. refinery runs rather than strong U.S. demand,” said Olivier Jakob, managing director at consultants Petromatrix GmbH in Zug, Switzerland.
“When refinery capacity utilization starts to increase and the jump in prices at the pump starts to have a greater impact on U.S. consumption,” support from gasoline could fizzle, Jakob said.
Fighting near the Libyan capital continued, forcing the United Nations to postpone an international peace conference to reconcile feuding factions and threatening to plunge the country back into civil war.
Forces loyal to Libya’s eastern military commander Khalifa Haftar have pushed their offensive on the country’s critical northwestern region in recent days, where they have run into opposition from militias allied with the internationally recognized government of Prime Minister Fayez Al-Sarraj. While Libyan oil production has risen in the last few years, it has been frequently disrupted by civil strife.
OPEC said its oil production plunged last month as its planned supply cutbacks were amplified by the crisis in Venezuela. It also pointed to a much tighter global crude market in coming months.
Oil output from the organization, which pumps 40 percent of the world’s supply, tumbled by 534,000 barrels a day to just above 30 million a day last month, the group said in a monthly report.
© 2019 Bloomberg L.P