Crude Oil Prices Settle Higher After Massive Draw in Gasoline Supplies

Investing.com – WTI crude oil prices settled higher as data showing a massive draw in gasoline supplies offset a build in crude stockpiles for the third-straight week.

On the New York Mercantile Exchange for April delivery rose 25 cents to settle at $60.96 a barrel, while on London’s Intercontinental Exchange, rose 0.11% to trade at $64.78 a barrel.

Inventories of U.S. crude rose by 5.022 million barrels for the week ended March 9, well above expectations for of 2.023 million barrels.

Gasoline inventories – one of the products that crude is refined into – by 6.271 million barrels, confounding expectations for a decline of 1.176 million barrels, while supplies of distillate – the class of fuels that includes diesel and – by 4.36 million barrels, beating expectations for a decline of just 1.519 million barrels.

The large draw in product inventories helped offset a gloomy report on oil outlook after OPEC nearly doubled its estimate on non-OPEC production for 2018.

OPEC raised its growth forecast for non-OPEC production in 2018 by 280,000 barrels a day (bpd) to 1.66 million bpd this year, warning that non-OPEC supply growth, led by the U.S., will outstrip growth in global oil demand in 2018. That echoed the EIA’s report Monday, estimating output from major shale formations to rise by 131,000 bpd in April to an all-time high 6.95 million bpd.

In sign that the oil-cartel’s production cuts could by waning, inventories across the most industrialized countries rose in January for the first time in eight months, according to OPEC’s monthly report.

Goldman Sachs, however, remained bullish on oil prices as the investment bank’s commodity research team said it expects global crude oil inventories to continue to decline.

“Combined with our expectation for strong oil demand growth and high OPEC compliance, we reiterate our constructive forecast on oil prices with global inventories set to fall further below their 5-year average levels through 3Q18,” Goldman Sachs said.

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