A pumpjack brings oil to the surface in the Monterey Shale, California, US, April 29, 2013. Reuters/Lucy Nicholson
Oil surged the most since the first of the month as American crude stockpiles at a key storage hub shrank by the most since August.
Futures rose as much as 3.7% in New York, the biggest intraday gain since Nov. 1. The Energy Information Administration reported that crude supplies at Cushing, Oklahoma, declined by 2.3 million barrels, the biggest draw in three months. Nationwide crude inventories rose 1.38 million barrels, less than reported by the American Petroleum Institute on Tuesday.
"The Cushing draw is pushing WTI prices higher for sure,” said Matt Sallee, portfolio manager at Tortoise, a Kansas firm that oversees more than $21 billion in assets. "We’ve seen some interruption from the Canadian supply, but it’s hard to say in any given week, but I think that’s what’s supporting WTI prices.”
Although nationwide crude stockpiles rose, the size of the build was smaller than the volume of crude released from the Strategic Petroleum Reserve. Combined crude and products inventories fell by 6.93 million barrels.
West Texas Intermediate for December delivery, which expires Wednesday, rose $2.04 to $57.25 a barrel at 12:25 p.m. on the New York Mercantile Exchange. The more-active January contract increased $1.99 to $57.34.
Brent for January settlement gained $1.86 to $62.77 a barrel on the London-based ICE Futures Europe Exchange. The global benchmark crude traded at a $5.43 premium to WTI for the same month.
The EIA report also showed gasoline inventories rose 1.76 million barrels while distillate supplies fell 974,000 barrels. Crude production remained strong at a record level of 12.8 million barrels a day for the second week in a row.
