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US oil prices shrug off jump in crude stocks
[NEW YORK] US oil prices rallied on Wednesday despite a larger-than expected jump in the country's crude stockpiles last week, which hit a new record high.
US benchmark West Texas Intermediate (WTI) for delivery in April climbed US$1.01 to US$51.53 a barrel on the New York Mercantile Exchange.
But in London Brent North Sea crude for April slipped 47 cents to US$60.55 a barrel.
The US Department of Energy (DoE) said commercial crude inventories jumped by 10.3 million barrels in the week February 27. Analysts surveyed by Bloomberg News had expected a gain of 3.8 million barrels, Inventories have set new records for five straight weeks.
However, inventories at the Cushing, Oklahoma hub, which serve as the reference point for WTI, rose by 500,000 barrels to 49.2 million barrels as expected.
Frost & Sullivan analyst Carl Larry said that WTI's resilience in the face of another big build in crude shows that "it's really fair value."
He noted that institutional money and hedge funds were coming into the market and buying.
Larry also underscored that the market was in a seasonal period of high stockpiles as refineries pull back for maintenance.
The global oil market has lost about 50 per cent of its value since June, weighed down by a supply glut and a slow expansion in the global economy.
In Libya, the National Oil Co declared force majeure Wednesday at 11 oil fields after attacks by Islamists, a legal step protecting it from liability if it cannot fullfil contracts for reasons beyond its control.
Islamist militants seized Al-Bahi and Al-Mabrouk fields on Tuesday and were heading for a third one, at Al-Dahra, said a spokesman for the Libyan oil industry's security service.
Amid fighting in the North African state, a member of the Opec oil producers cartel, daily crude output has been reduced from a high of almost 1.5 million barrels to 150,000, according to analysts.