Oil rose after a government report showed shrinking U.S. gasoline supplies, suggesting more demand ahead for crude as tensions flare in the Middle East.
Futures in New York gained 0.4%, closing at the highest in a week. The Energy Information Administration on May 15 said domestic gasoline inventories fell 1.12 million barrels, about four times deeper than analysts forecast. Refinery activity also ticked higher, showing crude processors are gearing up consumption after an unusually long maintenance season.
That offset a 5.43 million-barrel increase in American crude supplies that was less than some of the most bearish estimates had suggested.
“It’s a good demand indicator,” said Brian Kessens, who helps manage $16 billion in energy investments at Kansas-based money manager Tortoise. “The market is taking this report in stride or even seeing it as a bit better than many had expected.”
Prices rose May 14 after a drone attack in Saudi Arabia highlighted vulnerabilities in the world’s biggest oil exporter. In another ominous sign, the United States ordered all nonemergency American government staff to leave Iraq, citing a rising threat from Iranian-backed forces.
West Texas Intermediate crude for June delivery gained 24 cents to $62.02 a barrel on the New York Mercantile Exchange. Brent for July settlement rose 53 cents to $71.77 a barrel on the London-based ICE Futures Europe exchange.
Oil has swung between gains and losses this month as investors weigh an increasingly tense situation in the Persian Gulf and supply disruptions in other OPEC nations against an escalating U.S.-China trade conflict that threatens to curb consumption. The International Energy Agency on May 15 cut its forecast for demand growth, citing weak economic data in Asia.
“We’ve become used now to the ongoing supply worries,” IEA Head of Oil Industry and Markets Neil Atkinson said in a Bloomberg Television interview. The latest attacks in the Gulf appear not to have caused any “sustained damage,” and the market “remains focused on the underlying fundamentals.”
With assistance from Amanda Jordan, James Thornhill and Sharon Cho.