Oil edges lower after jumping on US crude stockpiles draw
PremiumU.S. crude inventories dropped the most in almost two months last week, while a gauge of gasoline demand ticked higher for a seventh straight week.
Oil edged lower in Asia after jumping almost 5% on Wednesday as U.S. stockpiles data added to signs the demand outlook is improving.
Futures in New York traded near $63 a barrel after closing higher for a third day, the longest run of gains in more than a month. U.S. crude inventories dropped the most in almost two months last week, while a gauge of gasoline demand ticked higher for a seventh straight week. The bullish data added to upbeat assessments by OPEC and the International Energy Agency.
Oil had been stuck near $60 a barrel after a rally faltered in mid-March amid a resurgence in virus cases in some regions. While the IEA sees a temporary lull in the market due to the renewed outbreaks, it followed OPEC in boosting its demand estimates for this year as the economy rebounds from the pandemic.
The prompt timespread for Brent was 43 cents a barrel in backwardation -- where near-dated contracts are more expensive than later-dated ones -- on Wednesday. That compares with 35 cents a week earlier.
U.S. crude stockpiles declined by 5.89 million barrels last week, according to Energy Information Administration data. Gasoline inventories rose for a second week, while distillate supplies -- a category that includes diesel -- fell for the first time since early March.
The market will soon have to deal with more supply, however. OPEC+ and U.S. producers are set to start adding extra barrels from May. Another wildcard is Iran, which is seeking to revive a 2015 nuclear deal and have U.S. sanctions removed to lift crude exports, but progress on that remains uncertain.
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