Investing.com – WTI crude oil prices settled higher Wednesday, as data showing an unexpected build in U.S. crude stockpiles amid a surge in imports, and production was offset by signs of strong demand as product supplies fell.
On the New York Mercantile Exchange for July delivery rose 1% to settle at $68.76 a barrel, while on London’s Intercontinental Exchange, rose 0.93% to trade at $72.83 a barrel.
Inventories of U.S. crude rose by 5.836 million barrels for the week ended July 13, confounding expectations for of 3.622 million barrels, according to data from the Energy Information Administration (EIA).
The unexpected build in crude supplies came as imports rose by 1.635m barrels a day (bpd), and output rose to a record 11 million bpd, the EIA said. The build in crude was limited somewhat by increased refinery activity, fuelling larger-than-expected declines in product inventories.
Gasoline inventories – one of the products that crude is refined into – by 3.165 million barrels, missing expectations for a draw of 0.044 million barrels, while supplies of distillate – the class of fuels that includes diesel and – by 0.371 million barrels, against expectations for a build of 0.873 million barrels.
Crude prices were also supported by supply disruptions in the Middle East as rebels in Yemen attacked an oil facility in Saudi Arabia, Reuters reported, citing John Kilduff, founding partner at energy hedge fund Again Capital.
The higher settlement in U.S. oil prices comes as oil observers continued to expect that major oil producers would have little room to address a potential global supply shortage despite a lower-than-expected loss of Iranian crude from the market amid a softer stance from the U.S. on Iranian oil importers.
OPEC countries have limited room to address the potential supply shortage, and in the next 12-18 months, the market will realize the US can’t support the entire market with spare capacity, RBC said earlier this week.
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