- WTI climbs to its highest level since December 11, while Brent on its way for its fourth consecutive weekly gain.
- US crude oil inventories rise for 16th straight week, but inventories drop at Cushing, Oklahoma delivery point for the first time in 5 months.
The price of US crude surged to its highest level since early December on Wednesday after government data showed oil supplies at a key US delivery hub eased for the first time in five months, while the US dollar plummeted across the board.
US benchmark West Texas Intermediate (WTI) for June delivery climbed 2.5 percent or $1.35 to $58.46 a barrel, its highest level since December 11. The US benchmark has rallied more than 40 percent since bottoming out around $42 in mid-March.
Global benchmark Brent crude also rose to new 2015 highs, climbing 1.5 percent or 92 cents to $65.56 a barrel. With the gains Brent is on its way to its fourth consecutive weekly gain.
US Oil Inventories
Oil prices surged on Wednesday after major market pressures showed signs of easing – namely, inventory buildup and the strong US dollar.
The Energy Information Administration (EIA) said inventory levels at the Cushing, Oklahoma delivery point fell 514,000 barrels in the week ending April 24, the first decline since November. Nationwide inventory levels rose to a record high for sixteenth consecutive week on a gain of 1.9 million barrels.
The US dollar plummeted on Wednesday, posting one of its biggest single-day declines this year after government data showed the economy barely grew in the first quarter. Gross domestic product – the value of all goods and services produced in the economy – increased just 0.2 percent annually, well below modest forecasts calling for 1 percent.
The dollar index closed at 95.22, down 0.9 percent.
The Federal Reserve held interest rates at record lows on Wednesday and gave no clues about the future path of monetary policy, but said policymakers will likely keep rates low even as inflation and unemployment approached the Fed’s target.
The target for the federal funds rate has been held between zero and 0.25 percent since December 2008.