Crude advanced to the highest this year after a further reduction in supply from OPEC signaled that global markets are tightening. Futures in New York added 1.6 percent on Thursday to close at the highest level since November. Declines in OPEC production are stoking optimism among investors as Saudi Arabia presses on with output curbs and power blackouts in Venezuela further squeeze supplies. Oil held its gains despite an industry report showing an unexpected jump in U.S. supplies last week.
Oil has rallied more than 30 percent this year as Saudi-led production cuts, together with receding fears over the global economic growth outlook, appear to be easing investor concerns.
West Texas Intermediate for May delivery climbed 99 cents to settle at $62.58 a barrel on the New York Mercantile Exchange. It was at $62.55 a barrel in trading after the close at 4:52 p.m., despite an American Petroleum Institute report that was said to show a 3 million-barrel increase in U.S. crude inventories. Brent for June settlement added 36 cents to end the session at $69.37 a barrel on the London-based ICE Futures Europe exchange and advanced to $69.43 after the API report. The global benchmark crude’s premium over WTI traded at $6.76 a barrel at the close, the smallest gap since August.
If the rise in U.S. stockpiles is confirmed by government data on Wednesday, it would be the second increase in a row and challenge assumptions that supplies are thinning. It would also contradict the 900,000-barrel drawdown forecast by a Bloomberg survey of oil analysts.
Oil Rises to Highest This Year as OPEC Curbs Stoke Optimism, Bloomberg, Apr 03