By Barani Krishnan
Investing.com — The oil market saw its biggest U.S. stockpiling in nearly five months, but crude prices rose instead of plunging on Thursday as traders offset this week’s sharp selloff driving the market higher – albeit modestly, given inventory data.
U.S. petroleum products, gasoline and distillates, also rose last week, albeit at levels far from expectations, the Energy Information Administration’s weekly State of Oil report showed.
Oil bulls tried to give a reason for Thursday’s market rebound after the Tuesday-Wednesday selloff that forced crude prices to settle in the previous session at their lowest level in seven months.
Some have used Vladimir Putin’s warning from a day ago that he would stop all energy exports from his country if there were more crackdowns on Russian oil and gas selling prices.
Others pointed to the US Strategic Petroleum Reserve, which again saw a major outflow of 7.5 million barrels last week, taking the stock to 442.5 million – its lowest since November 1984. The Biden administration has cut the SPR since November last year to fill the crude supply gap in the domestic fuel market.
But the best excuse seemed to be a technical rebound.
“Yes, overselling is a good excuse and a valid excuse here,” said Sunil Kumar Dixit, chief technical strategist at SKCharting.com. “But WTI’s upside looks limited to $86 and less likely to test $90. On the other hand, a rejection at $90 could again open the doors for a decline to $77.
WTI, or traded in New York, settled down $1.60, or 2%, at $83.54 a barrel, following Wednesday’s 5.7% drop.
the global oil benchmark, traded in London, gained $1.15, or 1.3%, to $89.15, after the previous session’s 5.2% decline.
With the rebound, WTI remained 36% below the 14-year high of $130.50 it hit on March 7 after the West’s initial sanctions on Russian energy exports following the invasion of Ukraine by Putin.
Brent remained 56% below its March high of $139.13.
rose 8.844 million last week, the highest in a week since the week ended April 8, when there was a build of 9.382 million. Industry analysts tracked by Investing.com were instead expecting a crude drawdown of 250,000 barrels for the past week. Crude construction indicated a weakening in demand for motor fuels as the peak summer travel season ended.
Stocks of , America’s premier automotive fuel, climbed a modest 333,000 barrels against expectations of a drawdown of 1.667 million barrels.
Stocks of – the oil variant needed to make the diesel needed for trucks, buses and trains, as well as fuel for jets – rose by 95,000 barrels, less than the 530,000 rise that had been forecast .
U.S. crude exports, another big component of the weekly data, slowed to 3.433 million barrels per day (bpd) last week from 3.967 million bpd the previous week.