A recovery in equity prices sparked last minute interest in crude oil futures on Wednesday while investors shrugged off a surprise increase in weekly crude supplies.
Crude oil had fallen 1.9 per cent and remained lower until the last half hour of floor trading. In an unexpected turn, crude for September delivery climbed 47 cents to settle at $88.97 a barrel on the New York Mercantile Exchange.
US stocks finished mixed after recent losses after weaker than-than-expected results from Apple and some sluggish housing data. However sentiment picked up after European Central Bank’s executive board, Ewald Nowotny, said European bailout fund may be given a banking licence which would help boost loans to countries such as Spain and Italy.
Bearish weekly supply data was also in focus on Wednesday. The Energy Information Administration said crude supplies rose 2.7m in the week ended July 20. Analysts had pencilled in a decline of 800,000 barrels. The EIA said the rise was caused by a sharp increase in imports and strong domestic output.
The data also showed an unexpectedly big increase in gasoline and distillates despite its being the height of the summer driving season. Gasoline inventories were expected to fall 750,000 barrels and distillates supplies were forecast to rise 1m barrels.
Among precious metals gold settled at the highest level since the start of July on Wednesday on fresh optimism about the Eurozone following comments that the ECB could apply for a banking license.
Gold for August delivery added $31.90 to settle at $1,608.10 an ounce on the Comex division of the New York Mercantile Exchange.