On the New York Mercantile Exchange, WTI crude for April delivery fluctuated between $34.20 and $35.30 a barrel before settling at $34.55, down 0.11 and 0.32% on the day. Expectations were for around 2.5 million barrels.
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Statistics from the U.S. Department of Energy showed a 10.4mln barrel rise in America’s crude inventory.
In its weekly figures, the US Department of Energy has yet announced a jump of more than ten million barrels of crude oil reserves, which remain at the top for over 85 years, and a consequent increase in revenue reserves as diesel or fuel oil, which is now higher by almost one-third the level of the same period in 2015 face lackluster demand.
Since it was unveiled in late 2014, Saudi Arabia’s strategy to bring the world’s oversupplied oil markets back into balance by squeezing competitors with lower prices has proved grueling, dragging crude down to less than $30 a barrel last month. Meanwhile, US oil and gas companies also lowered their shale oil production. In addition, media reports that after more than a year of failing to agree any steps, OPEC and outside producers have stepped up diplomatic activity to fix the supply glut.
The price collapse has also battered the national coffers of oil-producing countries.
Any agreement to freeze production may lead to a formal Opec gathering before the next scheduled meeting in June, but that would require wider cooperation by non-Opec producers, particularly Russian Federation.
Investors continued to digest a report from Reuters on Wednesday that Saudi Arabia has looked to initiate discussions with a host of major USA banks in an effort to secure a loan of up to $10 billion. Even though Iran has flatly refused to comply, Russia’s energy minister said a “critical mass” of countries had pledged to be on board.
But not all market watchers are excited about the possible freeze, saying that because many producers were already pumping at an exceedingly high rate in January, holding output at the January levels meant the global glut may take longer to dwindle.
“A lot of traders are keeping their powder dry in front of non-farm payroll data – it’s the No. 1 (indicator) in terms of crude consumers”, said Ben Le Brun, market analyst at Sydney’s OptionsXpress.
Rising oil prices this week are helping steer Asian shares toward their strongest week in five months, as global investors returned to riskier assets after a string of positive US economic data.
“The tight credit market will make it hard for USA shale producers to refinance upcoming debt and we may see an accelerated decline in USA oil production in 2016-17”, ANZ said in a note.
Nymex reformulated gasoline blendstock – the benchmark gasoline contract – fell 1.2% to $1.29 a gallon.
-Obafemi Oredein contributed to this article.