Oil Futures Settle Notably Higher

Crude oil futures ended notably higher on Wednesday, rebounding from the day’s lows, despite data showing an increase in U.S. crude inventories in the week ended June 5.

Prices were down earlier in the session as data from the Energy Information Administration (EIA) showed U.S. stockpiles increased by 5.7 million barrels in the week ended June 5 to 538.1 million barrels. Markets were expecting a draw of more than 1.5 million barrels in the week.

However, the data from the EIA also said domestic production fell last week and inventories saw a drop in Cushing, Oklahoma.

Following the Federal Reserve’s monetary policy announcement this afternoon, oil prices edged higher as the dollar weakened after the Fed indicated that interest rates will remain near zero through the end of 2022.

West Texas Intermediate Crude oil futures for July settled at $39.60 a barrel, gaining $0.66 or about 1.7%. Oil futures had dropped by more than 2% earlier in the day.

Brent crude futures moved up $0.34 to $41.52 a barrel by mid-afternoon.

The U.S. Energy Department said today that it purchased about 126,000 barrels of crude for the strategic reserve.

The EIA data said gasoline inventories rose 866,000 barrels last week, substantially higher than the expected increase, while distillate fuel inventories increased by 1.6 million barrels.

The American Petroleum Institute (API) reported late Tuesday that U.S. crude inventories rose by 8.4 million barrels in the week to June 5, compared with market expectations of a draw of 1.7 million barrels.

Crude oil prices have been supported by the decision of OPEC and allies to extend the 9.7 million barrels per day production cut by another month until the end of May.

The reopening of businesses in several countries across the globe has resulted in an uptick in global energy demand.

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