Oil was steady on Wednesday, trading near 18-month highs around $87 after a larger than expected drop in U.S. gasoline stockpiles signaled fuel demand was rebounding with an improving economic outlook.
U.S. crude for May was unchanged at $86.84 at 3:10 a.m. EDT, 25 cents shy of Tuesday's intraday peak of $87.09, the highest price since October 2008. London ICE Brent climbed 7 cents to $86.22.
Gasoline inventories in the U.S. fell a larger-than-expected 3 million barrels last week, the industry-funded American Petroleum Institute (API) said on Tuesday, Reuters says.
“The underlying sentiment in the market remains bullish, reflecting the positive economic news,” said David Moore, commodity strategist at Commonwealth Bank of Australia Ltd. in Sydney. “I’m skeptical about whether fundamentals really justify the oil price at current levels, and it may well pull back at some point.”
Crude oil for May delivery was at $86.88 a barrel, up cents, in electronic trading on the New York Mercantile Exchange at 3 p.m. Singapore time. Yesterday, the contract rose 22 cents to settle at $86.84. Futures reached $87.09, the highest intraday price since Oct. 9, 2008. Prices have risen 9.5 percent this year.
U.S. Federal Reserve officials saw signs of a strengthening recovery that could be hobbled by high unemployment and tight credit, and some warned of raising rates too soon, according to minutes of their March meeting released yesterday, Business Week informs.