WTI futures trim daily gains after bearish US supply data

Both West Texas Intermediate and Brent crude benchmarks trimmed their gains on Wednesday after the EIA reported the first gain in supplies at Cushing in ten weeks, coupled with a larger-than-expected jump in nationwide crude inventories. The market however remained underpinned by supply concerns stemming from persisting tension in eastern Ukraine, as well as a delay in the resumption of exports from two Libyan ports.

On the New York Mercantile Exchange, WTI crude for delivery in May traded at $102.55 per barrel at 14:54 GMT, down 0.01% on the day. Prices shifted in a daily range between $102.03 and a one-month high of $102.86 per barrel. The US crude benchmark rose by 2.11% on Tuesday and settled at $102.56.

Meanwhile on the ICE, Brent futures for settlement in the same month stood at $107.89 per barrel, up 0.20% on the day. Prices shifted between days low of $107.12 and a one-week high of $108.08 per barrel. The contract added 1.75% on Tuesday and settled at $107.67 a barrel. Brent traded at a premium of $5.34 to its US counterpart, up from Tuesdays settlement at $5.11, the lowest since October 2nd.

US crude was pressured after the Energy Information Administration reported a larger-than-expected gain in US crude supplies last week, while inventories at Cushing, Oklahoma, rose for the first time in ten weeks.

Nationwide stockpiles jumped by 4.0 million barrels in the seven days through April 4th, underperforming expectations for a 750 000-barrel jump, according to analysts surveyed by Bloomberg. At 384.1 million barrels, U.S. crude oil inventories are at the highest level in four months and in the upper half of the average range for this time of year.

Inventories at Cushing, Oklahoma, the biggest US storage hub and delivery point for NYMEX-traded contracts, rose by 345 000 barrels to 27.6 million barrels last week, the first increase in ten weeks.

Refineries operated at 87.5% of their operable capacity, down 0.2% from the preceding week. Both gasoline and distillate fuel production jumped, averaging 9.4 million and 4.8 million barrels per day, respectively.

Brightening the US demand outlook, total motor gasoline supplies fell by 5.2 million barrels last week, sharply exceeding analysts projections for a 1-million decline. Distillate fuel inventories, which include heating oil and diesel, jumped by 0.2 million barrels, compared to projections to remain unchanged.

Prices however remained supported as the resumption of exports from Libyas Zueitina and Hariga oil ports, which were supposed to be recommissioned immediately, was delayed until April 13, energy committee member Sliman Qajam said, cited by Bloomberg.

According to Sunday’s deal between rebels and the central government, Libya’s Zueitina and Hariga ports should have reopened immediately, while the two larger ports, Ras Lanuf and Es Sider, are supposed to be surrendered within the next two to four weeks after more negotiations. Es Sider, the country’s largest port, has a daily capacity of 340 000 bpd, while Ras Lanuf can ship 220 000 barrels per day.

The oil market was also pushed higher amid simmering tensions between Russia and the West. Moscow dismissed fears in Kiev and the West over thousands of Russian troops amassed near its border to Ukraine as “groundless”, blaming Washington for spurring tension between the sides. This comes after U.S. Secretary of State John Kerry said on Tuesday that Russian agents have been fuelling separatist disorder in eastern Ukraine.