Investing.com – Oil prices rose on Thursday as traders looked beyond a whopping jump in the weekly US crude inventories to focus on plummeting fuel stockpiles as maintenance season for refineries caused an unusual deficit in oil products.
settled up 57 cents, or 1%, at $ 53.93 per barrel.
closed up 49 cents, or 0.8%, at $ 59.91.
An easing of geopolitical tensions in the Middle East also did not keep oil down. Turkey has agreed to a five-day ceasefire in northeast Syria to allow the withdrawal of Kurdish forces, the US Vice President Mike Pence said after talks with Turkish President Tayyip Erdogan on Thursday.
U.S. Oil inventories soared for the most recent week, rising much more than the market had expected, the Energy Information Administration said.
jumped 9.3 million barrels last week, the EIA said. That compares to analysts' expectations of a rise of about 2.9 million barrels, according to forecasts compiled by Investing.com.
But fell by 2.56 million barrels, against expectations for a drawdown of about 1.21 million barrels. fell by 3.8 million barrels, with analysts predicting a decline of about 2.4 million barrels.
The decline in fuel stockpiles came after refinery runs fell just over 83% last week, one of the lowest in years after peak summer driving season. Refiners typically wind down operations during the fall season to do plant repairs or upgrades. This year, many refineries are taking longer to return to ensure compliance with new maritime fuel rules, dubbed IMO, taking effect in 2020.
"Refiners are really socking the oil bulls with their maintenance and telling with this humongous crude build, which is more than triple last week's," said Investing.com analyst Barani Krishnan.
"The constant talk that the new IMO rules for maritime fuels are distilling behind this drawdown is overwhelming and we see how accurate that is when refiners finally come out of their maintenance," he added.
John Kilduff, founding partner at New York energy hedge fund Again Capital, said the 83% refinery run rate was "a super-low rate, even for a post-driving season that I haven't seen in years."
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