Oil steadies at three-month high after surprise U.S. crude draw

NEW YORK (Bloomberg) - Oil steadied at the highest level since September after the U.S. government reported a surprise draw in crude inventories.

Futures in New York hovered near $61 a barrel. Crude supplies are at the lowest level since early November following a 1.1 million-barrel decline last week, according to the Energy Information Administration. Gasoline and distillate supplies rose by more than 5 million barrels combined, even as demand for the products rebounded.

“The report was modestly bullish,” said Matt Sallee, portfolio manager at Tortoise, a Kansas firm that oversees more than $21 billion in assets. “Gasoline continued its seasonal build.”

U.S. crude exports rose to the highest level since October, contributing to the inventory draw. A report from the industry-funded American Petroleum Institute had estimated a nearly 5 million-barrel build.

Crude has rallied more than 10% this month as the Organization of Petroleum Exporting Countries and its allies agreed to deeper-than-expected output cuts and amid signs that trade tensions between the world’s two largest economies are easing. However, forecast increases in production from non-OPEC countries next year may keep a lid on price gains.

West Texas Intermediate crude for January delivery, which expires Thursday, rose $0.10 at $61.04 a barrel on the New York Mercantile Exchange at 12:19 p.m. The contract settled at $60.94 Tuesday, the highest close since Sept. 16.

Brent for February settlement rose $0.17 to $66.27 a barrel on the London-based ICE Futures Europe Exchange after climbing 1.2% Tuesday. The global benchmark crude traded at a $5.29 premium to WTI for the same month.