Oil Rises On US Crude Drawdown But Oversupply Still Weighs
NEW YORK, May 20 (Reuters) - Oil prices rebounded on Wednesday, with U.S. crude snapping a five-day decline, after another weekly inventory draw but gains were still limited by a huge supply overhang and concerns about a stronger dollar.
U.S. crude stocks fell nearly 2.7 million barrels last week, down for a third consecutive week, as refineries hiked output, the government-run Energy Information Administration (EIA) said. Gasoline and distillate inventories also declined.
While the crude draw was nearly triple that estimated by analysts in a Reuters survey, it was only about half of the 5.2 million-barrel drop reported by industry group American Petroleum Institute, disappointing some market bulls.
"It's a fairly neutral report at the best as the weekly change is mildly bullish within a bearish overall stock situation," said James L. Williams, energy economist at WTRG Economics in London, Arkansas.
He noted that stockpiles were in "excellent shape" with crude inventories about 90 million barrels above year-ago levels, while refinery utilization rates were only a little higher at above 92 percent.
The dollar rose to a two-week high, before the release of the Federal Reserve's April meeting minutes that showed Fed officials thinking it would be premature to raise interest rates by June. A stronger dollar makes commodities priced in the greenback, including oil, less affordable for holders of other currencies.
U.S. crude settled up 99 cents, or 1.7 percent, at $58.98 a barrel.
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