Oil swings to 2016 highs

27-Apr-2016

Crude oil prices hit 2016 highs on Tuesday on the back of a rally in the gasoline market and after an industry group reported a surprise draw in US crude stockpiles.

Brent and US crude's West Texas Intermediate (WTI) futures finished regular trading about 3% higher, riding on the coattails of a gasoline rally that hit August highs after a series of refinery hikes, Reuters reported. In post-settlement trade, both benchmarks rose more than 4% after the American Petroleum Institute (API) reported a drawdown of nearly 1.1 million barrels in US crude inventories last week versus a 2.4 million-barrel build expected by analysts in a Reuters poll.

The API report is a precursor to official inventory data due on Wednesday from the US Energy Information Administration.

"There's a possibility we could see newer highs from here, notwithstanding the EIA data, as the market is really fired up on the idea of tightening supplies," said John Kilduff, partner at New York energy hedge fund Again Capital.

Brent crude futures finished up $1.26 at $45.74 a barrel. In post-settlement trade, it rose as much as $2.01 to a 2016 high of $46.49.

US crude futures settled up $1.40 at $44.04. It gained $2.19 in after-hours trade to reach a year-to-date peak of $44.83.

Crude markets got off to a rousing start in the New York session as gasoline futures and gasoline refinery margins both surged from refinery outages, Venezuela buying and a reported drop in New York inventories.

"I think the market has become more optimistic on oil products," said Scott Shelton, broker and commodities specialist with Icap in Durham, North Carolina. (by Reuters)