Oil prices rose on Thursday after the U.S. government reported a much smaller-than-anticipated rise in crude stocks, but gains were capped by worries about the spread of Coronavirus outside China.
Data from the U.S. Energy Information Administration (EIA) showed that crude inventories rose only 414,000 barrels last week, compared with expectations of a 2.5 million barrel rise from analysts in a Reuters poll.
However, scores of new coronavirus cases and a first death in South Korea fanned fears of global pandemic as research suggested it could be more contagious than previously thought.
Brent crude rose 47 cents, or 0.8%, to $59.59 per barrel. The front-month U.S. West Texas Intermediate crude futures contract, which expires Thursday, gained 74 cents, or 1.4%, to trade at $54.03 a barrel. The more-active second-month WTI benchmark was up 95 cents, or 0.7%, at $54.44 a barrel.
Immediately after the EIA data, Brent front month, front month WTI and second month WTI touched their highest in February.
“The overall (EIA) numbers were kind of bullish… What seems to be pulling us back down a little bit is concerns of coronavirus kicking back in a little bit,” said Phil Flynn, an analyst at Price Futures Group in Chicago.
U.S. gasoline stockpiles fell by about 2 million barrels in the week to Feb. 14, while analysts had estimated an increase of 435,000 barrels, according to the EIA data.
The data also showed that U.S. East Coast refinery utilization rates fell last week to 59.2%, the lowest since November 2012. However, overall U.S. refinery utilization rates rose 1.4%, primarily as the refiners came out of maintenance.
China’s move to cut its benchmark lending rate helped ease some worries about slowing demand in the world’s second-biggest oil consumer and largest crude oil importer.
Also supporting oil prices were U.S. sanctions this week on a trading unit of Russian oil giant Rosneft for its ties with Venezuela’s state-run PDVSA and conflict in Libya that has led to a blockade of its ports and oilfields.
Brent could extend gains to $60.22 a barrel, as suggested by its wave pattern and a projection analysis, said Reuters technical analyst Wang Tao.
Brent crude futures for nearby delivery were also trading at a premium to future months, a structure called backwardation, signalling a potential tightening in supplies.