U.S. oil futures settled higher Wednesday after U.S. government data showed a third consecutive weekly decline in domestic crude supplies. Oil inventories in Cushing also rose in the past week.
West Texas Intermediate crude for November delivery rose 93 cents, or 2.4%, to settle at $40.22 a barrel on the New York Mercantile Exchange. Prices based on the front-month contracts saw monthly fall of 5.6%, but ended 2.4% higher for the quarter, according to Dow Jones Market Data. They had posted gains in each of the last four months reported MarketWatch.
The December Brent crude contract, which became the front month at the end of the session, tacked on 74 cents, or 1.8% at $42.30 an ounce. November Brent crude , which expired at the end of the day’s regular trading, edged down by 8 cents, or 0.2%, at $40.95 a barrel.
Based on the front months, Brent prices were down 9.6% for the month and posted a quarterly loss of 0.5%.
Prices, however, still suffered their first monthly decline since April as concerns persist about the global economic outlook and its impact on demand.
The Energy Information Administration reported Wednesday that U.S. crude inventories fell for a third straight week, down by 2 million barrels for the week ended Sept. 25. That compared with an average climb of 1.9 million barrels expected by analysts polled by S&P Global Platts, while the American Petroleum Institute on Tuesday had reported a fall of 831,000 barrels.
The data revealed an unexpected draw in crude oil, but traders should “definitely take note of the large build” at the trading hub in Cushing, Okla., Tariq Zahir, managing member at Tyche Capital Advisors, told MarketWatch.
The EIA data showed crude stocks at the Cushing, Okla., storage hub rose by 1.8 million barrels for the week.
Overall, the risk for oil prices is to the downside, with another wave of the coronavirus impacting demand as the market goes through the fourth quarter, said Zahir. “Couple that with additional supply that has come back to the market from Libya,” following the recent lift of a months-long blockade on crude exports.