Oil Hits $60 After Biggest U.S. Crude Storage Drop Since July

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(Bloomberg) — Oil rose above $60 a barrel in New York for the first time in more than four months after the biggest withdrawal of crude in U.S. storage tanks since July signaled tightening supplies.

Futures advanced as much as 1.7 percent on Wednesday. A 9.59 million-barrel decline in American oil stockpiles reported by the government confounded all 10 forecasts from analysts in a Bloomberg survey. U.S. crude exports jumped while domestic inventories of gasoline and diesel shrank.

“Exports continue to be pretty strong,” said Brian Kessens, portfolio manager and managing director at Tortoise Capital Advisors LLC in Leawood, Kansas. “There was some doubt about how much the U.S. could actually export from an infrastructure perspective and now that we’re consistently above 3 million barrels a day I think there’s a lot of confidence that that number can be sustained.”

Oil has gained more than 30 percent to start the year, supported by output cuts by OPEC and partners, in addition to supply disruptions in Iran and Venezuela. Rallies have been capped by ongoing fears over the course of U.S.-China trade negotiations.

West Texas Intermediate crude for April delivery rose 99 cents to $60.02 a barrel at 12:02 p.m. on the New York Mercantile Exchange. Brent for May delivery added 88 cents to $68.49 on the London-based ICE Futures Europe exchange.

Historically, crude stockpiles accumulate in the world’s biggest economy at this time of year as refiners perform maintenance and transition from producing winter to summer-blend gasoline.

“This is a counter-seasonal draw, which basically puts an exclamation point on the back end of it,” said Bob Yawger, director of the futures division at Mizuho Securities USA in New York.

Other oil-market news:
  • Gasoline futures gained 1.1 percent to $1.9140.
  • Firefighting crews early Wednesday extinguished a petrochemical tank fire near Houston that had blazed for almost four days.
  • The reshaping of the oil industry over the past five years — driven by the shale boom and the deep price slump — has put the major international companies back on top, says Goldman Sachs Group Inc.

–With assistance from Nancy Moran.

To contact the reporter on this story: Ben Foldy in New York at bfoldy@bloomberg.net

To contact the editors responsible for this story: Pratish Narayanan at pnarayanan9@bloomberg.net, Joe Carroll, Jessica Summers

©2019 Bloomberg L.P.

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