Oil Stays Higher Despite Surprise Increase In U.S. Crude Stocks

Investing.com – Crude prices held on to gains on Wednesday, even after data showed that U.S. oil stockpiles rose unexpectedly last week.

New York-traded tacked on 46 cents, or about 0.7%, to $66.00 a barrel by 10:35AM ET (1535GMT). Prices were at around $66.03 prior to the release of the inventory data.

The U.S. Energy Information Administration said in its weekly report that crude oil inventories rose by in the week ended April 6.

That compared with analysts’ expectations for a decline of around 0.6 million barrels, while the American Petroleum Institute late Tuesday reported a supply-gain of 1.8 million barrels.

Supplies at Cushing, Oklahoma, the key delivery point for Nymex crude, rose by 1.1 million barrels last week, the EIA said.

Total U.S. crude oil inventories stood at 428.6 million barrels as of last week, which the EIA considered to be in the lower half of the average range for this time of year.

Domestic oil production- driven by shale extraction – rose to a fresh all-time high of 10.52 million barrels per day last week, keeping it above Saudi Arabia’s output levels and within reach of Russia, the world’s biggest crude producer.

Analysts and traders have recently warned that booming U.S. shale oil production could potentially derail OPEC’s effort to end a supply glut.

The report also showed that gasoline inventories increased by , compared to expectations for a decline of 1.4 million barrels. For distillate inventories including diesel, the EIA reported a drop of .

Meanwhile, , the benchmark for oil prices outside the U.S., jumped 43 cents, or roughly 0.6%, to $71.48 a barrel.

Brent surged to its highest level since late 2014 earlier in the session, boosted by the .

While Syria is not a significant oil producer itself, the wider Middle East is the world’s most important crude exporter and tension in the region tends to put oil markets on edge.

There are also concerns that the United States could renew sanctions against Iran, a major Middle East oil producer.

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