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Crude Oil Futures – Weekly Outlook: May 22 – 26

Commodities20 hours ago (May 21, 2017 06:26AM ET)
© Reuters.  Oil prices score a more than 5% advance for the week© Reuters. Oil prices score a more than 5% advance for the week

Investing.com – Oil futures settled at a four-week high on Friday, with prices scoring a weekly gain of more than 5% amid optimism that key producers will extend output cuts beyond an agreed-on June deadline when they meet later this month.

The U.S. West Texas Intermediate crude June contract tacked on 98 cents, or around 2%, to end at $50.33 a barrel by close of trade Friday, the first time it has settled above $50 in more than four weeks. It touched the highest since April 21 at $50.53 earlier in the session.

The U.S. benchmark rose $2.49, or about 5%, on the week, the second straight weekly advance.

Elsewhere, on the ICE Futures Exchange in London, Brent oil for July delivery added $1.10 to settle at $53.61 a barrel by close of trade, after hitting a daily peak of $53.82, a level not seen since April 19.

For the week, London-traded Brent futures recorded a gain of $2.77, or roughly 5.2%.

Oil ministers from the Organization of Petroleum Exporting Countries and other major producing countries will meet in Vienna on May 25 to decide whether to extend their current production agreement beyond a June 30-deadline.

In November last year, OPEC and 11 other non-OPEC producers, including Russia, agreed to cut output by about 1.8 million barrels per day between January 1 and June 30.

Most market analysts expect the oil cartel to extend output cuts for a further nine months until March 2018, instead of six months as previously expected.

There is also talk that OPEC is looking at the option of deepening current production cuts, but it is not clear whether there would be support for that.

So far, the production-cut agreement has had little impact on global inventory levels due to rising supply from producers not participating in the accord, such as Libya, and a relentless increase in U.S. shale oil output.

Data from energy services company Baker Hughes showed on Friday that U.S. drillers last week added rigs for the 18th week in a row, the second-longest such streak on record, implying that further gains in domestic production are ahead.

The U.S. rig count rose by 8 to 720, extending an 11-month drilling recovery to the highest level since April 2015.

Elsewhere on Nymex, gasoline futures for June gained 4.6 cents, or about 2.9% to end at a four-week high of $1.652 on Friday. It closed up around 4.8% for the week amid easing concern over lackluster demand.

June heating oil added 3.7 cents to finish at $1.582 a gallon. For the week, the fuel tacked on roughly 6%.

Natural gas futures for June delivery rose 7.4 cents to settle at $3.256 per million British thermal units, up 2.3% for the session but about 4.9% lower for the week.

In the week ahead, market participants will focus on the Organization of Petroleum Exporting Countries highly-anticipated meeting on Thursday to see whether major producers plan to extend their current production-cut agreement.

Meanwhile, oil traders will eye fresh weekly information on U.S. stockpiles of crude and refined products on Tuesday and Wednesday to gauge the strength of demand in the world’s largest oil consumer.

Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.

Tuesday, May 23

The American Petroleum Institute, an industry group, is to publish its weekly report on U.S. oil supplies.

Wednesday, May 24

The U.S. Energy Information Administration is to release weekly data on oil and gasoline stockpiles.

Thursday, May 25

Major global oil producers are due to meet in Vienna in order to decide on extending their current output-cut deal.

The U.S. government is to produce a weekly report on natural gas supplies in storage.

Friday, May 26

Baker Hughes will release weekly data on the U.S. oil rig count.

Crude Oil Price Forecast: Pushing Into Important Price Resistance

DAILY FX

Can OPEC push crude oil prices higher? To see our thoughts, access the DFX Q2 Oil forecast here.

Talking Points:

  • Crude Oil Technical Strategy: Bullish on a close above $50/bbl
  • OPEC expected to extend production cuts in Vienna next week
  • Oil price remains trapped in bearish falling channel, < Ichimoku cloud

The price of WTI crude Oil does not seem to be bothered by the headlines signaling political turmoil in the US, but rather is favoring the outlook that OPEC is expected to extend the production curb another 9-months. On May 25, investors will likely get confirmation of whether or not the production cuts will be extended, but we have already heard the support of the idea from Russia and Saudi Arabia. While many feel that OPEC has been left little choice, but to cut production due to the increase in production from shale discounting their efforts, traders still seem content to bid for Oil, which has kept the price pushing ever higher towards the important $50/bbl level for WTI Crude. The question that will continue to remain, even if the 9-month extension is approved and compliance among the members remains impressive is whether or not Non-OPEC production (i.e., shale) will swamp the deal’s effectiveness and keep the market oversupplied.

While the fundamental story shows that we should be working ever-closer to a balanced market with OPEC increasing how long they will pull back production, the charts seem also seem to favor upside if the price can close on a daily basis above $50/bbl. Given the current news cycle and encouraging EIA inventory data out of the US, the market appears to be supported near $48/bbl. A break above $50 along with the developing sentiment picture below helps to paint a picture that we’ll soon see a move to the top of the falling bearish channel near $52/bbl.

If the price can break above the top of the bearish channel, we expect the US production to play less of a factor in headlines as traders start to focus once again on an approach toward $60/bbl. If crude does move higher, it’s worth keeping an eye on Oil-driven currencies like USD/CAD, USD/NOK, and USD/MXN.

Of course, OPEC is working to put the market in a place where demand outstrips supply. If they can do that, they’ll need a helping hand from the demand side, which will likely be dependent on a resumption of positive economic activity in the US & China that has been absent of late.

Join Tyler in his Daily Closing Bell webinars at 3 pm ET to discuss tradeable market developments.

Crude Oil continues to stay offered below $47.11 as Ichimoku favors downside continuation

Crude Oil Price Forecast: Pushing Into Important Price ResistanceChart Created by Tyler Yell, CMT

Crude Oil Sentiment:

Crude Oil Price Forecast: Pushing Into Important Price ResistanceOil – US Crude: As of May 8, retail trader data shows 68.0% of traders are net-long with the ratio of traders long to short at 2.13 to 1. In fact, traders have remained net-long since Apr 19 when Oil – US Crude traded near 5301.8; price has moved 7.3% lower since then. The number of traders net-long is 6.6% lower than yesterday and 23.0% lower from last week, while the number of traders net-short is 3.4% higher than yesterday and 11.2% higher from last week.

We typically take a contrarian view to crowd sentiment, and the fact traders are net-long suggests Oil – US Crude prices may continue to fall.Yet traders are less net-long than yesterday and compared with last week. Recent changes in sentiment warn that the current Oil – US Crude price trend may soon reverse higher despite the fact traders remain net-long. (Emphasis Mine)

Shorter-Term US OIL Technical Levels: Thursday, May 18, 2017

For those interested in shorter-term levels of focus than the ones above, these levels signal important potential pivot levels over the next 48-hours.

Crude Oil Price Forecast: Pushing Into Important Price ResistanceWritten by Tyler Yell, CMT, Currency Analyst & Trading Instructor for DailyFX.com

Oil prices slump as DC turmoil weighs on ‘fragile’ sentiment

CNBC

A deepening political crisis in Washington accelerated the decline in prices. Investors became increasingly cautious following the latest reports of links between Russia and the campaign to elect Donald Trump president.

Traders said news that advisers to the president’s campaign last year had at least 18 undisclosed contacts with Russians had unsettled investors. Crude futures turned sharply lower after Reuters reported the news.

“Sentiment is fragile so it does not take much to rock the boat even further,” said Ole Hansen, head of commodity strategy at Denmark’s Saxo Bank. “This is a general risk-off move.”

Oil jack pumps are pictured in the Kern River oil field in Bakersfield, Calif.

Jonathan Alcorn | Reuters
Oil jack pumps are pictured in the Kern River oil field in Bakersfield, Calif.

Brent crude was down 38 cents at $51.83 a barrel by 9:43 a.m. ET (1343 GMT). U.S. crude oil fell 35 cents to $48.72.

Both benchmarks rose on Wednesday after news of a drawdown in U.S. crude inventories and a dip in U.S. output. The U.S. Energy Information Administration said inventories fell 1.8 million barrels in the week to May 12 to 520.8 million barrels.

But the U.S. crude drawdown was smaller than expected and the oil market remained extremely well supplied, analysts said.

“Crude stocks are still higher than last year’s stock levels … There is a long way to go before we arrive at five-year average stock levels,” said Sukrit Vijayakar, director of Trifecta energy consultancy.

A surplus of U.S. supply has led to large volumes of crude being exported from the United States to northern Asia, undermining the OPEC-led efforts to tighten the market.

The Organization of the Petroleum Exporting Countries and other producers including Russia pledged to cut output by almost 1.8 million barrels per day (bpd) in the first half of 2016, a deal likely to be extended until the end of March 2018.

Here's why commodities king Dennis Gartman is not buying the surge in oil

Why commodities king Dennis Gartman is not buying the oil surge   

Other producers have been quick to fill any supply gaps.

Shipping data in Thomson Reuters Eikon shows that U.S. crude exports to Asia have soared from a handful of tankers a quarter throughout 2015 and 2016 to 10 tankers in the first quarter of 2017 and that figure is expected to rise.

North Sea oil shipments to Asia have also been at record highs this year, with 19 tankers delivering in the first quarter and a similar amount expected to go to Asia in the second.

OPEC ministers meet in Vienna on May 25 to decide production policy for the next six months and are expected to prolong their agreement to limit production, perhaps by up to nine months.

UBS oil analyst Giovanni Staunovo said he saw a 60 percent probability of OPEC extending output cuts. That should help tighten the oil market and push up prices as demand rises gradually this year, he said.

“Capped OPEC/Russian production with stronger seasonal demand during summer sets the stage for oil prices to reach $60 a barrel over the coming months,” he said.

— CNBC’s Tom DiChristopher contributed to this report.

Oil rebounds on Saudi assurances Russia will extend supply cuts

Business News |

REUTERS

By Scott DiSavino | NEW YORK

NEW YORK Oil prices closed 1.5 percent higher on Friday, rebounding from five-month lows, following positive U.S. jobs data and assurances by Saudi Arabia that Russia is ready to join OPEC in extending supply cuts to reduce a persistent glut.

The market, however, remained in technically oversold territory with futures trading down as much as 19 percent from highs in mid April, prompting some speculators to exit their long positions.

Brent futures gained 72 cents, or 1.5 percent, to settle at $49.10 a barrel, while U.S. West Texas Intermediate crude climbed 70 cents, or 1.5 percent, to close at $46.22 per barrel.

After falling almost 5 percent on Thursday, both contracts continued to collapse overnight with WTI falling to $43.76, its lowest since Nov. 15, and Brent down to $46.64, its lowest since Nov. 30 when the Organization of the Petroleum Exporting Countries (OPEC) agreed to cut production during the first half of 2017.

Both benchmarks pared losses after Saudi Arabia’s OPEC Governor Adeeb Al-Aama told Reuters that OPEC and non-OPEC nations were close to agreeing to extend a deal to curb production by 1.8 million barrels per day (bpd) for six months from Jan. 1.

“Based on today’s data, there’s a growing conviction that a six-month extension may be needed to rebalance the market, but the length of the extension is not firm yet,” the Saudi official said.

OPEC sources said on Thursday that OPEC is likely to extend cuts when it meets on May 25 but that a deeper cut is unlikely.

In the United States, meanwhile, job growth rebounded sharply in April and the unemployment rate dropped to 4.4 percent, near a 10-year low, according to government data.

“The jobs report is extremely positive for the U.S. economy…and should help boost oil demand,” said Mark Watkins, regional investment manager for U.S. Bank’s private client group in Park City, Utah.

Despite gains on Friday, both benchmarks declined for a third week in a row – Brent by about 5 percent and WTI by 6 percent – in their longest losing streak since November.

“The energy complex is slowly succumbing to an opinion that this year’s OPEC production cuts have been ineffective,” Jim Ritterbusch, president of Chicago-based energy advisory firm Ritterbusch & Associates, said in a note.

“We feel that the (OPEC) cartel has come to a fork in the road in which the current agreement will be abandoned or steps will need to be taken to double down on current efforts by increasing production curtailments,” Ritterbusch said.

Brent traded volumes on Thursday reached a record high of nearly 542,000 contracts, suggesting that hedge funds had accelerated reductions to their long positions. (tmsnrt.rs/2oSQUu5).

Pierre Andurand, who runs one of the biggest hedge funds specializing in oil, liquidated his fund’s last long positions in oil last week and is running a very reduced risk at the moment, a market source familiar with the development said.

“It is now-or-never for oil bulls,” said U.S. commodity analysis firm The Schork Report. “They either put up a defense here or risk further emboldening the bears for a run at the $40 threshold (for WTI).”

(Additional eporting by Dmitry Zhdannikov in London and Henning Gloystein, Mark Tay and Roslan Khasawneh in Singapore; Julia Simon in New York; Editing by Marguerita Choy and David Goodman)

Oil dives, sending U.S. crude below $50 for first time in two weeks

REUTERS

By Julia Simon | NEW YORK

NEW YORK Oil prices tumbled more than 2 percent on Friday, notching the biggest weekly decline in more than a month on mounting evidence that U.S. production and inventory growth were offsetting OPEC’s attempts to reduce the global crude glut.

Brent futures LCOc1 settled at $51.96 a barrel, down $1.03, or 2 percent at the market’s close. U.S. crude futures CLc1 ended at $49.62 a barrel, down 2.2 percent, or $1.09.

Volumes were heavy, with more than 665,000 WTI futures changing hands, surpassing the daily average of 525,000 contracts.

For the week, Brent fell 7 percent, while U.S. crude lost 6.7 percent. It was the largest percentage drop for both benchmarks since the week of March 10, when rising concern about the supply glut undermined big bets on an oil rally.

Those speculative bets have been on the rise again. On Friday, the U.S. Commodities Future Trading Commission (CFTC) showed total long positions in U.S. crude rose in the week to April 18 to their highest in more than a month at 355,077 contracts. But oil has sagged in recent days, much as it did in March.

Many in the market still expect the Organization of the Petroleum Exporting Countries (OPEC) to renew its production cuts for another six months. On Friday an OPEC and non-OPEC member technical committee recommended extending cuts of almost 1.8 million barrels per day (bpd) at the upcoming May 25 meeting.

Still, shipment data shows more oil transiting world oceans than when cuts were put in place.

“The reason that we’re seeing the selloff today and really for this week has been related to the fact that we’re seeing higher waterborne imports arriving from the Middle East,” said Matt Smith, director of commodity research at Clipperdata.

“We should continue to remain well supplied at least over the next few weeks.”

In addition, Russia’s Energy Minister Alexander Novak declined to say whether Russia would adhere to an extension, saying global stocks were declining.

Bjarne Schieldrop, chief commodities analyst at Nordic bank SEB, does not expect OPEC to roll over its cuts, saying it could potentially leave the cartel vulnerable to “more stimulus of the U.S. shale oil sector.”

U.S. production, already at its highest since August 2015, looks likely to keep rising. U.S. drillers added rigs for a 14th consecutive week, Baker Hughes said on Friday.

(Additional reporting by Ron Bousso in London, Henning Gloystein in Singapore; Editing by David Gregorio and Chizu Nomiyama)

US crude oil stocks fall by 1.3 million barrels

 

Pipelines and oil storage tanks in Cushing, Okla.

3 ways to play rising oil: Gartman   

U.S. crude stocks fell unexpectedly last week as imports declined and refinery runs rose, while gasoline and distillate inventories also drew, industry group the American Petroleum Institute said Tuesday.

Crude inventories fell by 1.3 million barrels in the week to April 7 to 532.4 million, compared with analysts’ expectations for an increase of 87,000 barrels. Crude stocks at the Cushing, Oklahoma, delivery hub rose by 358,000 barrels, API said.

Refinery crude runs rose by 57,000 barrels per day, API data showed.

Gasoline stocks fell by 3.7 million barrels, compared with analysts’ expectations in a Reuters poll for a 1.7 million-barrel decline.

Distillate fuels stockpiles, which include diesel and heating oil, fell by 1.6 million barrels, compared with expectations for a 885,000-barrel drop, the API data showed.

U.S. crude imports fell last week by 15,000 barrels per day to 7.8 million bpd.

WTI Crude Oil and Natural Gas Forecast

By: DailyForex.com

WTI Crude Oil

The WTI Crude Oil market rallied significantly during the day on Friday, mainly in reaction to a nice uptrend, and of course the US airstrikes against the Syrian military. However, a less than stellar job report turned everything around and we ended up forming something akin to a shooting star. While I do not suspect that this market’s going to break down right away, I do recognize that the market is starting to run out of momentum. Because of this, a breakdown below the bottom of the candle would be and I selling opportunity and should send this market looking for the $51 level, and then possibly the $50 level. A break above the top of the candle should be a buying opportunity in theory, but there is a lot of noise above that will come into play, making it a very difficult trade.

Crude oil

Natural Gas

The natural gas markets rallied initially as well, but turned around to test the $3.25 level. The market breaking down below there could send the market down to the $3.13 level, an area that has been supportive. There is a gap down there, so I think that at this point we will more than likely will find buyers that will keep the market somewhat afloat. At this point, it looks as if choppy conditions will continue, but it’s more than likely going to be bullish in general. Short-term, I’m looking to sell but I do expect to see the buyers return.

If we broke down below the $3.10 level, then I think the trend may turn around, but we have seen such a move higher and the fact that the 50 and the 100-day exponential moving averages have crossed suggests that there is still a significant amount of bullish pressure underneath in the natural gas markets.

Natural gas

Journal of Petroleum Technology

New Technology Could End Costly Crude Oil Pipeline Blockages

Mon, 04/03/2017 – 1:02pm

by University of Houston
This is an artist’s rendering of a prototype device that would electrokinetically remove asphaltenes from crude oil near the point of production. Source:Yao et al., 2015, Department of Petroleum Engineering, University of Houston

Getting crude oil from the wellhead to its downstream destination can be literally stopped in its tracks when components of the oil known as asphaltenes clump together, reducing the flow or causing a complete blockage.

A petroleum engineer from the University of Houston has reported building a prototype device to address the problem, which currently requires the use of chemical dispersants and inhibitors or a physical process to remove the accumulated solids.

Konstantinos Kostarelos, associate professor of petroleum engineering at UH, described the device and the way it works in the Journal of Petroleum Technology.

Blockages happen when molecules called asphaltenes — which make up the heaviest fraction of crude oil — solidify with pressure and temperature changes once outside the reservoir. Over time, that builds up and hardens on the inside of the pipe, resulting in reduced flow or complete blockage of producing wells and surface equipment, including pumps, pipelines and separators, the researchers said.

“You have a clean pipe and things flow normally, but the coating of the asphaltenes inside the pipe builds up, so if your pipe diameter was six inches, it slowly becomes five inches, then four inches — so the pipe size is not what was designed,” Kostarelos said.

When that happens the flow rate is reduced. Pumps can increase the flow rate, but require huge amounts of pressure.

To address the problem, the researchers built a prototype device that would remove asphaltenes from crude oil near the point of production, using electrokinetics. “A scaled-down device was fabricated and tested using a model oil to prove the concept and study some of the parameters that would influence the design of a larger-scale device,” they wrote.

Coauthors on the paper include UH undergraduate students Clint Martin, Kyo Tran, Jose Moreno and Aaron Hubik, along with Shahab Ayatollahi of Sharif University of Technology.

The process involved putting two electrical plates, charged at 4,000 volts, into the pipe. The plates attract the asphaltene, removing it from the flowing oil.

“The asphaltene molecules, which are polar, start coating the plates and we remove the plates periodically,” said Kostarelos. “It worked better than I expected.”

Future work will involve using a wider variety of solvents and ultimately, a prototype that can be used with produced crude.

Crude Oil Price Forecast

Oil Has Best Week In 2017 On OPEC Hopes

by  Tyler Yell, CMTForex Trading Instructor

Position Trading based on technical set ups, Risk Management & Trader Psychology.

In a divorce from typical correlations, both US Dollar via the DXY and Crude Oil have found life at the end of Q1 17. Month end flows tend to be erratic, and thus, the broader multi-week trend should take preference over the multi-day move. However, the overall correlation of DXY & USOIL has dropped to a level of near meaningless with a 20-day correlation as of March 30 of -.138.

In addition to the erratic end of month order flow, it’s worth keeping an eye on the headlines for Crude Oil, which have recently touted initial support from OPEC members to extend the cut. The Production, which reached agreement in late November is scheduled to expire in June, but the option to extend the cuts were seen as a possibility if such action would help secure a balancing in the Oil. Given the large rise in Shale production in the US, which has seen a doubling of active Oil rigs since the May 2015 low per Baker Hughes International, a production cut extension from OPEC and likely Russia, could go a long way in putting a higher price floor under Oil.

CRUDE OIL – Technical Analysis: Whether or not Crude Oil is correcting a downtrend or beginning a new rise to 2017 highs is the key questions. The price is at a key juncture whereas a corrective move higher, that would favor new lows would favor price resistance near $52/bbl. Specifically, $51.97 is the 61.8% retracement of the late-February to March range. A turnaround lower below or near $52 that subsequently breaks below $47 would open up a move to the $40-44 zone we’ve long watched as likely support in a more significant downturn.

However, absent the risk of a turnaround lower in Crude, traders should watch for a clean break higher to nullify the view that we’ll see an extension lower. Traders would do well to watch a break above $52 as an argument that Crude may have put in another higher price floor near the 200-DMA ($48.63/bbl.).

Are commodity prices matching DailyFX forecasts so far in 2017? Find out here!

Crude Oil Price Forecast: Oil Has Best Week In 2017 On OPEC HopesChart created using TradingView

The price action in late March has looked like consolidation, but one concern worth mentioning is the strong bounce in RSI(5). The bounce in RSI(5) looks corrective, which favors a trend continuation move lower and possibly to the $44/40 zone in the coming weeks if further weakness surfaces.

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Crude Sentiment Shows Retail Bulls Adding To Longs In Hope Of A Bullish Reversal

Crude Oil Price Forecast: Oil Has Best Week In 2017 On OPEC HopesIG Retail trader data shows 65.1% of traders are net-long with the ratio of traders long to short at 1.87 to 1. In fact, traders have remained net-long since Mar 01 when Oil – US Crude traded near 5433.1; theprice has moved 7.2% lower since then. The number of traders net-long is 12.0% lower than yesterday and 9.5% lower from last week, while the number of traders net-short is 23.2% higher than yesterday and 7.3% higher from last week.

We typically take a contrarian view to crowd sentiment, and the fact traders are net-long suggests Oil – US Crude prices may continue to fall. Traders are less net-long than yesterday and compared with last week. Recent changes in sentiment warn that the current Oil – US Crude price trend may soon reverse higher despite the fact traders remain net-long. (Emphasis Mine)

— Written by Tyler Yell, CMT, Currency Analyst & Trading Instructor for DailyFX.com

Key LevelsOver the Next 48-hrs of Trading as ofThursday, March 30, 2017

Crude Oil Price Forecast: Oil Has Best Week In 2017 On OPEC HopesFor those interested in shorter-term levels of focus than the ones above, these levels signal important potential pivot levels over the next 48-hours of trading.

Oil rallies to 3-week high as traders cheer U.S. supply data

MARKET WATCH

Bloomberg News/Landov
A crude oil storage tank at Cushing storage terminal in Cushing, Oklahoma
By

MyraP. Saefong

Markets/commodities reporter

SaraSjolin

Markets reporter

Oil prices rallied Wednesday, settling at their highest level in roughly three weeks after data from the Energy Information Administration showed a weekly rise in U.S. crude inventories that was below some market forecasts, along with bigger-than-expected declines in gasoline and distillate stockpiles.

Disruptions to crude output in Libya, as well as hopes for a six-month extension to the production cut agreement, led by the Organization of the Petroleum Exporting Countries, added further support to oil prices.

Combined, the upbeat factors “offered the market a touch of optimism that perhaps things are headed in the right direction for global balance,” said Jenna Delaney, senior oil analyst at Platts Analytics, a unit of S&P Global Platts.

May West Texas Intermediate crude CLK7, +0.71%  rose $1.14, or 2.4%, to settle at $49.51 a barrel on the New York Mercantile Exchange. The contract settled at its highest level since March 9, according to FactSet data. May Brent LCOK7, +0.17%  gained $1.09, or 2.1%, to $52.42 a barrel.

The EIA reported that crude inventories rose by 900,000 barrels to a weekly record 534 million barrels for the week ended March 24. But that rise was less than half the 1.9 million-barrel climb posted by the American Petroleum Institute late Tuesday.

Analysts polled by S&P Global Platts forecast a climb of 300,000 barrels, while others expected an even larger increase, with Citi Futures forecasting a 2 million- to 3 million-barrel rise.

“An extremely big jump in refinery activity on the Gulf Coast, a tick lower in imports and a rebound in exports has led to a lower-than expected-build to crude inventories,” said Matt Smith, director of commodity research at ClipperData. But that’s “an increase nonetheless—lifting oil inventories to a further new record.”

Still, Phil Flynn, senior market analyst at Price Futures Group, pointed out that supplies in the Strategic Petroleum Reserve fell by more than 700,000 barrels and “if you add that to commercial-oil inventories, the increase in supply looks smaller.”

The EIA also said gasoline supplies dropped 3.7 million barrels, while distillate stockpiles fell 2.5 million barrels last week. The Platts survey forecast a fall of 2.1 million for gasoline and decline of 1.1 million for distillates.

On Nymex, April gasoline RBJ7, +0.53%  rose 3.7 cents, or 2.3%, to $1.672 a gallon, while heating oil for the same month HOJ7, +0.51%  gained 2.6 cents, or 1.7%, to $1.543 a gallon.The feud between Iran and Saudi Arabia intensified at the start of last year, but the two nations have since made moves to bridge their longstanding divide.

Elsewhere in energy trading, natural gas for April US:NGJ17  ended at $3.175 per million British thermal units, up 7.9 cents, or 2.6%. The contract expired at the day’s settlement.

The EIA will issue its weekly update on U.S. natural-gas supplies Thursday, with an S&P Global Platts survey of analysts forecasting a decline of 43 billion cubic feet.