Oil prices almost reaches one-month peak
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Oil prices have come close to their highest levels in nearly a month following statistics that show there has been an unexpected rise in US inventories.
According to new government data, US crude stockpiles rose by 1.6 million barrels at the start of April as refineries produced significantly more oil.
Analysts had previously expected the US Department of Energy data to confirm a drop in inventories after preliminary figures from the American Petroleum Institute showed a fall of 1.8 barrels at the end of March, which had prompted an oil price increase.
"As expectations of a drawdown in bulging US crude inventories trickled through the market, bulls returned to the fore and triggered a wave of buying," said Stephen Brennock of London-based broker PVM.
Prices were also supported by an unexpected outage at the Buzzard field in the North Sea, which is the largest contributor for the crude stream that feeds prices for the global benchmark, Brent.
Producer nations and Opec countries including Russia and the US have previously agreed to cut supplies this year in an attempt to reduce inventories and boost prices. However, the resurgent US shale industry has so far kept prices at a tight range.
Despite this news, analysts at JBC energy believe the cuts will eventually push oil prices higher for investors. "Even in the event of Opec/non-Opec not extending the cuts into [the second half of the year], the world would still continue to draw stocks at a mild pace of about 200,000 b/d until September, thereby lending support to prices one way or another," they said.