(Bloomberg) -- Oil prices climbed to their highest so far this year as a decline in U.S. crude and fuel stockpiles added to evidence of a tightening market.
Futures in New York rose 2.4 percent on Wednesday, closing above $58 a barrel for the first time since mid-November. The U.S. Energy Department's closely watched weekly inventory report showed a 3.86 million-barrel decline for crude last week, defying forecasts of an increase. A 4.62 million drawdown for gasoline was the steepest since October.
Oil has rallied almost 30 percent this year as the Organization of Petroleum Exporting Countries and its allies curbed production and Venezuela's exports collapsed under political turmoil. Record U.S. output has hung over the market, but falling stockpiles in one of the world's biggest energy consumers suggest the risk of a glut is receding.
“We see this data as bullish for crude over the longer term," Leo Mariani, a Keybanc Capital Markets Inc. analyst, wrote in a note to clients. The combined fall in crude and refined products “implies that the market is under-supplied."
Oil also rode a surge for equities fueled by encouraging data on U.S. factory orders.
West Texas Intermediate for April delivery gained $1.39 to close at $58.26 a barrel on the New York Mercantile Exchange.
Brent for May settlement rose 88 cents to $67.55 a barrel on the London-based ICE Futures Europe exchange. The global benchmark crude traded at an $8.96 premium to WTI for the same month.
Prices had already been on track for their third straight advance after an industry group released its own report of declining inventories, a mild surprise at a time when refinery maintenance usually undercuts demand.
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Crude and refined products in storage fell by 10.2 million barrels last week, according to the Energy Information Administration's report. Total petroleum stockpiles were the lowest since December. Oil imports also slipped, offering another sign that OPEC cuts and U.S. sanctions on Venezuela are impacting the market.
“On the bullish side we have a rapidly deteriorating situation in Venezuela,” said Bjarne Schieldrop, Oslo-based chief commodities analyst at SEB AB. “Further on the bull side, OPEC+ continues to deliver on pledged cuts.”
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--With assistance from James Thornhill, Tsuyoshi Inajima and Grant Smith.
To contact the reporter on this story: Alex Nussbaum in New York at anussbaum1@bloomberg.net
To contact the editors responsible for this story: James Herron at jherron9@bloomberg.net, Carlos Caminada
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