Oil Closes Near $54 as White House Says No Change in Fuel Rule

Oil Falls Amid Signs of OPEC Output Gain While Gasoline Tumbles

(Bloomberg) -- Oil closed near $54 a barrel in New York as declines eased after a White House spokeswoman said there are no immediate plans to change the renewable fuel standard compliance structure.

Futures fell as much as 1.6 percent earlier on speculation that billionaire investor Carl Icahn and the leading U.S. biofuel trade group had presented a plan to the Trump administration to revamp a law requiring refiners to either blend petroleum-based fuels with ethanol and biodiesel, or buy blending credits called RINs. No ethanol rule is in the works, White House spokeswoman Kelly Love said. Prices were little changed from the close after an industry report was said to show U.S. crude supplies climbed last week.

"There was a sharp rally in crude at the end of trading, even though we ended lower for the day," said Thomas Finlon, director of Energy Analytics Group in Wellington, Florida, in a telephone interview. "The White House denied there was any change coming to renewable fuel standards. There wasn’t a lot to the original report that sent prices lower."

Oil Closes Near $54 as White House Says No Change in Fuel Rule

As the Organization of Petroleum Exporting Countries and 11 other nations reduce supply to end a three-year glut, U.S. drillers are ramping up operations, sowing speculation they could fill the gap left by OPEC’s cuts. That’s subduing price swings, sending the Chicago Board Options Exchange Crude Oil Volatility Index on Monday to the lowest since October 2014. Prices in February were locked in their narrowest range in 13 years.

West Texas Intermediate for April delivery fell 4 cents to $54.01 a barrel on the New York Mercantile Exchange. Prices advanced 0.5 percent this month. WTI futures have bounced between $51.22 and $54.94 a barrel in February, the tightest range since August 2003. WTI traded at $53.90 at 4:42 p.m.

Inventory Reports

Stockpiles climbed 2.5 barrels last week in an American Petroleum Institute report Tuesday, people familiar with the data said. The Energy Information Administration is projected to report on Wednesday that inventories rose by 3 million barrels last week from the highest level in weekly data going back to 1982, according to a Bloomberg survey.

Brent for April settlement, which expired Tuesday, declined 34 cents to $55.59 a barrel on the London-based ICE Futures Europe exchange. The global benchmark closed at a $1.58 premium to WTI. The more-active May contract rose 9 cents to $56.51.

OPEC output rose by 55,000 barrels a day in February, Vienna-based consultant JBC Energy GmbH said. 

See also: Barkindo says non-OPEC members lagging on agreed output cuts

"The market has been trying to break out to the upside and has yet to get the final impetus," Gene McGillian, manager of market research for Tradition Energy in Stamford, Connecticut, said by telephone. "That’s probably due to U.S. inventories that are at three-decade highs, U.S. production rising above 9 million barrels a day again and the huge global supply overhang."

March gasoline futures, which expired Tuesday, dropped 1.4 percent to close at $1.512 a gallon on the Nymex. April gasoline slipped 1.3 percent, after earlier falling as much as 3.6 percent in early trading. The April crack spread, a rough measure of the profit from refining crude ended lower, but gave up some early losses.

Oil-market news:

  • EOG Resources Inc. boosted its drilling budget by 44 percent and said the rebound in crude prices isn’t raising equipment and manpower costs in the oil fields.
  • BP Plc said it will need a crude price of about $40 a barrel in 2021 to cover spending and dividends, down from $60 this year, as Chief Executive Officer Bob Dudley seeks to reassure investors on the oil major’s growth outlook and finances.
  • OPEC is delivering more than 90 percent of its agreed curbs, Secretary General Mohammad Barkindo said in Abuja, Nigeria.
  • Russia, acting in tandem with the group, deepened its output cuts in February by 6,600 barrels a day, Interfax reported, citing a person it didn’t identify.

--With assistance from Javier Blas and Grant Smith

To contact the reporter on this story: Mark Shenk in New York at

To contact the editors responsible for this story: Reg Gale at, Carlos Caminada, Debarati Roy