Oil futures eked out a gain Wednesday, setting another five-week high, as traders shrugged off a bigger-than-expected rise in crude-oil inventories.
Light, sweet crude for May delivery settled 24 cents, or 0.3%, higher at $96.58 a barrel on the New York Mercantile Exchange, the highest settlement since Feb. 19. Brent crude on ICE Futures Europe settled 33 cents, or 0.3%, higher at $109.69 a barrel.
Crude oil spent most of the day in negative territory after the Energy Information Administration said U.S. oil stockpiles rose 3.3 million barrels last week, above the 700,000-barrel gain projected by analysts in a Dow Jones Newswires survey.
Meanwhile, stockpiles at the key U.S. hub of Cushing, Okla., rose 500,000 barrels, reversing recent declines that had signaled to traders that a supply glut there was drifting.
Still, the gains were muted by a drop in gasoline and distillate stockpiles and an increase in refinery activity, suggesting higher demand from refineries to produce to fuel. Prices scrapped their losses through the afternoon to notch a fourth straight session of gains.
"We've had a couple big days to the upside," said Peter Donovan, vice president at Vantage Trading in New York. "Today's sell-off was pretty meager and maybe guys read into it that this isn't ready to give anything back."
Gasoline stocks fell by 1.6 million barrels last week. Stocks of distillates, including heating oil and diesel, tumbled by 4.5 million barrels. Refinery utilization rose 2.2 percentage points to 85.7% of capacity.
Analysts had expected gasoline stocks to fall just 900,000 barrels and distillate inventories to give up 600,000 barrels. Refinery runs were seen rising a modest 0.3 points.
With Wednesday's gain, Nymex crude prices are up 6.5% so far in March, helped by expectations that a supply glut in the central U.S. had begun to ease and bring U.S. prices back in line with global benchmarks like Brent.
The gap between the two crudes has shrunk to around $13 a barrel, down from more than $23 in February. But Wednesday's reported inventory increase at Cushing--the Nymex delivery point--has undermined expectations that the supply glut was resolved.
"The Brent-[WTI] move continues to be a powerful factor in the market," said Andy Lebow, senior vice president of energy futures at Jefferies Bache.
Front-month April reformulated gasoline blendstock, or RBOB, settled 0.49 cent, or 0.2%, higher at $3.1155 a gallon. April heating oil settled 3.41 cents, or 1.2%, higher at $3.1155 a gallon.
Copyright (c) 2012 Dow Jones & Company, Inc.
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