Oil climbed above $45 a barrel in New York for the first time since November after U.S. industry data showed a decline in crude stockpiles.
West Texas Intermediate futures climbed as much as 2.5 percent, extending a gain of 3.3 percent Tuesday. Oil was trading at $44.89 at about 8 a.m. Central.
Inventories dropped by 1.07 million barrels last week, the industry-funded American Petroleum Institute was said to report. The World Bank boosted its forecast for oil prices this year, projecting that refinery demand will pick up and U.S. output cuts will steepen in the second half of 2016.
“The recent leg higher in oil prices is due to the tightening of the supply side of the market,” Jens Naervig Pedersen, an analyst at Danske Bank A/S in Oslo, said by e-mail. “U.S. production is edging lower, the rig count suggests there’s more to come, and the API figures from yesterday pointing to stock draws further confirm this development.”
Oil has rebounded, after slumping to the lowest level since 2003 earlier this year, amid signs the global surplus will ease as U.S. production declines. Markets may rebalance by the end of the year, BP Plc Chief Executive Officer Bob Dudley said Tuesday as the company reported a surprise first-quarter profit.
West Texas Intermediate for June delivery rose as much as $1.09 to $45.13 a barrel on the New York Mercantile Exchange and was at $44.95 at 12:11 p.m. London time. The contract gained $1.40 to $44.04 on Tuesday, the highest close since Nov. 10. Total volume traded was about 14 percent below the 100-day average. Prices advanced 8.4 percent last week.
Brent for June settlement increased as much as $1.31, or 2.9 percent, to $47.05 a barrel on the London-based ICE Futures Europe exchange. The contract gained $1.26 to $45.74 a barrel on Tuesday. The global benchmark crude traded at a premium of $1.81 to WTI.
Crude stockpiles at Cushing, Oklahoma, the delivery point for WTI and the biggest U.S. oil-storage hub, increased by 1.9 million barrels last week, the API reported Tuesday, according to a person familiar with the numbers. Nationwide inventories are forecast to expand by 1.75 million barrels, according to the median estimate in a Bloomberg survey before an Energy Information Administration report Wednesday.