Crude oil finished at its highest level in nearly sixth months Wednesday as a Department of Energy report revealed inventories rose less than expected. Better-than-expected employment data also boosted the prospects for struggling energy demand.
Light sweet crude oil for June settlement ended at $56.34 per barrel, up $2.50 on the session, marking the highest closing price for a front-month contract since mid-November. Oil reached as high as $56.47 earlier in the session.
Energy Information Administration data showed U.S. commercial crude oil inventories increased by 600,000 barrels from the previous week. Experts were looking for a build of about 2.2 million barrels. At 375.3 million barrels, U.S. crude oil inventories are at their highest level in nearly two decades.
Total motor gasoline inventories decreased by 200,000 barrels last week, distillate fuel inventories increased by 2.4 million barrels and propane/propylene inventories increased by 2.4 million barrels
On Tuesday night, the American Petroleum Institute reported crude stockpiles fell by 1 million barrels, while gasoline inventories dropped by 2.9 million barrels. Refinery participation is voluntary for the API report but required for EIA data.
On the economic front, the Automatic Data Processing report showed that non-farm private employment fell by 491,000 jobs in April following a revised decrease of 708,000 jobs in March. Economists had expected a decrease of 645,000 jobs compared to the loss of 742,000 jobs originally reported for the previous month.
Traders also await the release of the results of the government's stress tests of leading financial institutions after the close of trading on Thursday. Media reports surfaced saying that the government stress tests have determined that JP Morgan (JPM), Goldman Sachs (GS), American Express (AXP), and Bank of New York Mellon (BK) will not need additional capital.
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