Oil prices hit new 2015 highs as US inventories drop

Oil prices scored new 2015 peaks Wednesday after weekly data showed US commercial crude stockpiles unexpectedly slumped in the first decline in four months.

US benchmark West Texas Intermediate (WTI) for delivery in June added 53 cents at $60.93 a barrel on the New York Mercantile Exchange, its highest level since early December.

Brent North Sea crude for June, the European benchmark, settled at $67.77 a barrel in London, up 25 cents from Tuesday and also its peak for the year to date.

Oil prices scored new 2015 peaks Wednesday after weekly data showed US commercial crude stockpiles unexpectedly slumped in the first decline in four months

Oil prices scored new 2015 peaks Wednesday after weekly data showed US commercial crude stockpiles unexpectedly slumped in the first decline in four months ©Georges Gobet (AFP/File)

WTI, which had jumped more than $2 in early trading, sharply paired the gains after the US Department of Energy reported the first decline in commercial crude-oil stockpiles in 16 weeks.

"It is buy the rumor, sell the fact," said Matt Smith of Schneider Electric, noting the American Petroleum Institute's report Tuesday had already indicated a drawdown in stockpiles.

"We've rallied 50 percent on WTI since the lows of March and 30 percent on Brent, so it's not surprising we're running a bit out of steam."

Crude stockpiles tumbled by 3.9 million barrels in the week to May 1. Analysts had expected an increase of 1.5 million barrels, according to a Bloomberg News poll.

Despite the decline, at 487.0 million barrels of crude, the stockpiles were at their highest level on record for this time of year.

US crude-oil production only slipped marginally, to 9.4 million barrels per day. Refineries stepped up activity, pushing capacity utilization up to 93 percent.

"I think this trend of decline in inventories is going to continue as refineries in the US increase their utilization during the summer as they return from maintenance," said Andy Lipow of Lipow Oil Associates.

Oil also enjoyed support from the weaker dollar, which fell sharply Wednesday amid poor US economic data. The euro was buying $1.1340 in the early afternoon in New York, up from $1.1185 late Tuesday.

Crude stockpiles tumbled by 3.9 million barrels in the week to May 1. Analysts had expected an increase of 1.5 million barrels

Crude stockpiles tumbled by 3.9 million barrels in the week to May 1. Analysts had expected an increase of 1.5 million barrels ©Justin Sullivan (Getty/AFP/File)

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