Oil Prices Bounce Back on Bets for Big Drop in U.S. Crude Supplies

Investing.com – Crude prices were higher in early dealings on Wednesday, bouncing back from the prior session’s losses amid speculation weekly supply data due later in the day will show a sizable decline in U.S. oil supplies.

The U.S. Energy Information Administration will release its for the week ended Dec. 8 at 10:30AM ET (1530GMT).

After markets closed Tuesday, the American Petroleum Institute said that U.S. oil inventories last week. That compared with analysts’ expectations for a decline of around 3.8 million barrels.

However, the API report also showed a gain of around 2.3 million barrels in gasoline stocks, while distillate stocks, which include motor diesel and heating oil, increased by about 1.5 million barrels.

There are often sharp divergences between the API estimates and the official figures from EIA.

U.S. West Texas Intermediate (WTI) tacked on 52 cents, or about 0.9%, to $57.67 a barrel by 3:40AM ET (0840GMT), after sliding 1.5% a day earlier.

Meanwhile, futures, the benchmark for oil prices outside the U.S., were at $64.13 a barrel, up 78 cents, or 1.3%, from their last close.

The contract shed 2.1% in the prior session after rallying to its best level since July 2015 at $65.83 on news of a major pipeline outage in Europe.

Britain’s biggest pipeline from its North Sea oil and gas fields is likely to be shut for several weeks for repairs, its operator said on Tuesday. The pipeline, which carries about 450,000 barrels per day (bpd) of Forties crude, was shut after cracks were found.

It has particular significance to global markets because Forties is the largest out of the five crude oil streams that underpin the dated Brent benchmark.

In other energy trading, tacked on 0.4 cents, or 0.3%, to $1.710 a gallon, while added 1.1 cents to $1.945 a gallon.

jumped 4.2 cents, or 1.6%, to $2.720 per million British thermal units. It ended down 5.3% to $2.678 per million British thermal units on Tuesday, amid forecasts for less heating demand through late December.

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