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Oil Bounces Higher as Inventories Tumble

© Reuters.

Investing.com – Oil prices jumped Wednesday as the U.S. government said inventories fell much more than expected.

jumped 4.2% to $58.48 per barrel having already surged 3.7% on reports suggesting deeper output cuts from the OPEC+ group of producers at their meeting later this week.

futures, the global benchmark, gained 4.2% to $63.38.

Refinery runs came in at 91.9% last week, up from below 90% last week.

“It appears that refineries are back in full force and drawing down crude to turn out products, which in turn, aren’t moving as much as market bulls would expect given the seasonal trends at this time,” Investing.com analyst Barani Krishnan said. “Instead of crude builds, we now have higher-than-expected gasoline and distillate stockpiles.”

fell by 4.9 million barrels for the week ended Nov. 29, the Energy Information Administration said, compared with expectations for a drop of 1.73 million barrels, according to forecasts compiled by Investing.com.

rose by 3.4 million barrels, versus forecasts for a rise of about 1.8 million barrels, while rose by about 3.1 million barrels, compared with expectations for a build of about 1.1 million.

“We’re likely to see steady distillate builds from here with some exception for holiday-season trucking delivery,” Krishnan said. “Unless we get unexpectedly high demand for from a polar vortex in January/February, I don’t see distillates staying as the outlier for the oil complex. Gasoline demand is already on the wane, as per seasonal trends.”

“Yet, with OPEC upon us, the market is trading other variables, like deeper production cuts and other market manipulating action that’s being floated around,” he added. “On top of it, (President Donald) Trump is back to sending markets on a wild goose chase with his off-on-and-now-on-again trade talks with China.”

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Source: Investing.com