Oil prices climb despite jump in US stockpiles

January 28, 2016 | 12:58

(0) user say

Oil prices ended choppy trade higher on Wednesday after US government data showed crude inventories climbed to a record level while crude production inched lower.

Oil prices ended choppy trade higher on Wednesday after US government data showed crude inventories climbed to a record level while crude production inched lower. (AFP/Haidar Mohammed Ali)

NEW YORK: Oil prices ended choppy trade higher on Wednesday (Jan 27) after US government data showed crude inventories climbed to a record level while crude production inched lower.

US benchmark West Texas Intermediate for March delivery finished at US$32.30 a barrel on the New York Mercantile Exchange, a gain of 85 cents from Tuesday's settlement. In London, Brent North Sea crude for March, the European benchmark for crude oil, jumped US$1.30 to US$33.10 a barrel.

In a continuation of volatile trade since last week, WTI and Brent opened in the red but bounced sharply higher after the US Department of Energy said US commercial crude inventories leaped by 8.4 million barrels in the week ending Jan 22.

That was about double the increase expected and, at 494.9 million barrels, crude stockpiles were the highest on record.

Prices pared gains in late afternoon trade after WTI struck a high of US$32.84 around midday.

Partly explaining the market's positive reaction was that inventories came in below the 11.4-million-barrel gain reported by the American Petroleum Institute on Tuesday, said Bob Yawger of Mizuho Securities. "The market was eager to pick a bottom," he said.

The DoE report also showed a drop in US distillate fuel inventories, which include diesel, by 4.1 million barrels. US crude oil production dipped by 14,000 barrels a day to 9.22 million barrels a day.

AFP

What the stars mean:

★ Poor ★ ★ Promising ★★★ Good ★★★★ Very good ★★★★★ Exceptional