Investing.com – Oil prices headed higher on Thursday as analysts ruled out faltering demand in the U.S. despite a large build in stockpiles, while ongoing OPEC production cuts and U.S. sanctions on Iran and Venezuela supported market rebalancing.
New York-traded rose 65 cents, or 1.16%, at $56.87 a barrel by 8:38 AM ET (13:38 GMT).
Meanwhile, , the benchmark for oil prices outside the U.S., traded up 73 cents, or 1.11%, to $66.72.
Although Wednesday’s data on U.S. stockpiles showed a surge in inventories last week, the jump was attributed to seasonality rather than a sign of weakness in demand.
Energy analyst Ellen Wald explained that the build in crude oil stores was “seasonally appropriate” and that the data also showed a draw in gasoline stores of 4.2 million barrels.
“The key element to take away from the EIA report is that the large build in crude oil stocks is in the U.S. or globally. Gasoline demand is still strong, and jet fuel demand is only slightly lower,” she said.
Backing the narrative that demand remains solid, Ole Hansen, head of commodity strategy at SaxoBank, pointed to the fact that the (bpd) jump in stockpiles was driven by a 1.6 million bpd rebound in net-imports. “Crude oil imports from U.S. main suppliers all rose last week,” he noted.
Meanwhile, oil has rallied more than 20% this year on the back production cuts of 1.2 million barrels per day from OPEC and its partners, most notably Russia, as they scramble to tighten supply and support prices.
Reuters quoted sources this week that said OPEC is likely to of whether or not to extend those cuts to its June meeting, instead of April, when they have a better perspective on market rebalancing.
U.S. sanctions against OPEC members Venezuela and Iran have also helped curb supplies.
Venezuela’s state-run oil firm PDVSA this week declared a maritime emergency, citing trouble accessing tankers and personnel to export its oil amid the sanctions.
With regard to sanctions on Iran, country’s that were granted waivers on oil imports were scrambling to extend the timing conceded by Washington past May.
Among those, India is seeking to maintain imports of Iranian oil at its current level of about 300,000 barrels per day (bpd), according to a on Thursday.
In other energy trading, gained 1.38% to $1.8137 a gallon by 8:41 AM ET (13:41 GMT), while rose 0.60% to $2.0282 a gallon.
Lastly, declined 0.46% to $2.828 per million British thermal unit.
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Source: Investing.com
