Oil veered wildly yesterday, as it swung back from a spike higher on a sharp fall in US crude oil stocks shown in weekly data.
US crude leapt $5.49 to $136.80 a barrel immediately after the release of the data. It quickly retreated to $134.66 up by $3.35 by 1507 GMT. The US government’s Energy Information Administration showed US crude oil stocks fell 4.6 million barrels to 302 million barrels last week, four times the drop analysts’ expected. London Brent crude was trading $2.50 higher at $133.52.
“The crude oil draw was a surprise,” said Jim Ritterbusch, the president of Ritterbusch & Associates said. “This decline in crude cover back to this pivotal area around 300 million barrels is becoming a bit of a concern.”
Oil had been up more than $3 ahead of the US data due to strong growth in China’s oil imports.
Oil major BP said the world’s proven oil reserves were mostly unchanged last year, a further indication of tightening global oil supplies, also contributing the rise.