NEW YORK (Reuters) – Oil prices climbed more than 2% on Wednesday after a better-than-expected U.S. crude inventories report and as Russia said it would continue its cooperation with OPEC to keep the global oil market balanced.
FILE PHOTO: An oil pumpjack is seen in La Canada de Urdaneta, Venezuela October 1, 2019. REUTERS/Jose Nunez
Brent crude LCOc1 futures gained $1.34, or 2.2%, at $62.25 a barrel by 1:24 p.m. EST (1824 GMT), while West Texas Intermediate crude CLc1 futures rose $1.61, or 2.9%, to $56.82 a barrel.
U.S. crude oil stocks grew by 1.4 million barrels last week, the Energy Information Administration said, compared with analysts’ expectations for 1.5 million-barrel build and the 6 million-barrel build reported by the American Petroleum Institute late Tuesday.
Refinery runs rose 519,000 barrels per day and crude in storage at the Cushing, Oklahoma, delivery hub for WTI fell 2.3 million barrels, EIA said
“The data is starting to reflect the return of refineries from maintenance, especially on the U.S. Gulf Coast,” said Andrew Lipow, president of Lipow Oil Associates in Houston.
Prices pulled back slightly after Reuters reported that the first phase of a trade deal between Beijing and Washington might not get done this year, trade experts and people close to the White House said.
U.S. crude demand has slowed during the protracted trade war with China, and hopes for an end to the dispute in the signing of a so-called Phase One agreement have dimmed amid disagreements over the removal of tariffs.
China on Wednesday also condemned legislation passed by the U.S. Senate aimed at protecting human rights in Hong Kong amid a crackdown on a pro-democracy protest movement.
Oil prices were supported by comments from Russian President Vladimir Putin that Russia will continue cooperation under a global supply-curbs deal with the Organization of the Petroleum Exporting Countries (OPEC).
OPEC meets on Dec. 5 in Vienna, followed by talks with a group of other exporters, including Russia, known as OPEC+.
Escalating Iran-related tensions also boosted prices.
The U.S. aircraft carrier strike group Abraham Lincoln on Tuesday sailed through the vital Strait of Hormuz, through which a fifth of the world’s oil flows, as leaders in Iran blamed days of protests over fuel price hikes on foreign enemies.
Tensions in the Gulf have risen in the wake of attacks on oil tankers this summer, including off the coast of the United Arab Emirates, and a major attack on key Saudi energy plants which briefly crippled from the world’s top oil exporter.
Iran’s President Hassan Rouhani on Wednesday claimed victory over protests which have left scores reported dead.
“These events contribute to a sense of increasing tensions in the Middle East and explain why we have an uptick in the oil price today,” said SEB chief commodities analyst Bjarne Schieldrop.
Additional reporting by Scott DiSavino in New York, Noah Browning in London, Seng Li Peng; Editing by Marguerita Choy and Bernadette Baum