Oil prices gained following data from the American Petroleum Institute (API) data on Wednesday.
U.S. West Texas Intermediate crude futures gained 0.4 percent, up 28 cents to $53.82 a barrel while Brent crude futures gained 24 cents or 0.4 percent at $67.66 per barrel.
In Crushing, Oklahoma, inventories increased 1.644 million barrels during this week.
The data showed healthy global demand with U.S. crude oil inventories drawing 2,739 million barrels compared to analyst’s estimates of 2,556 million barrels for the week ending March 16. There was a further draw of gasoline this week of 1.0633 million in stockpiles.
U.S. Crude Oil Production
The U.S. crude oil production has seen a surge since mid-2016 overtaking Saudi Arabia, the top exporter and are now at 10.38 million barrels per day. Russia produces 11 billion barrels per day.
Some analysts say that in order to prevent another price crash, U.S. producers are holding back and are not at their limits yet.
FGE energy consultancy firm said in a note that in order to avoid past mistakes and despite the growth in U.S. production, to avoid past mistakes larger players are holding back.
In further developments, this week saw the arrival in Washington of Saudi Arabia’s Crown Prince Mohammed bin Salman who is reported to be meeting with President Trump. Speculation from market participants is that they will discuss re-imposing sanctions on Iran, whose concern is that Iran will get its hands on a nuclear weapon.
AsiTrader, chief market strategist, Greg McKenna reportedly said that the key driver is to put added pressure on Iran. Whilst FGE energy consultancy said that it was very likely that sanctions would be re-imposed by the U.S. on Iran which would see a drop of around 250,000 to 500,000 barrels per day in exports by the end of the year.