Oil up 3rd day in row as bulls defy U.S. crude build By Investing.com

By Barani Krishnan

Investing.com — Oil prices rose for a third day in a row as bulls in the space were defiant on Wednesday to data showing a seventh straight build in weekly crude stockpiles amid rising production and falling exports.

Generous builds were also noted in inventories of gasoline and distillates in the Weekly Petroleum Status Report issued by the EIA, or Energy Information Administration, for the week ended Feb. 1. 

The rise in gasoline stockpiles raised questions about demand for the automotive fuel as warmer-than-usual winter weather should have, theoretically, seen more people get behind the wheel at this time of the year versus seasonal norms. The build in distillates is also bucking trends as demand for heating oil would be stronger now, if not for the unusually warm winter.

Notwithstanding these, oil prices rose more than 1% Wednesday as those long the trade tried to stay focused on impending demand from China, the world’s largest crude importer which has been off COVID-related restrictions since the start of the year — a development that should lead to more energy usage.

Oil bulls also ignored news that Turkey resumed crude-oil flows to the Mediterranean export terminal of Ceyhan late on Tuesday following two devastating earthquakes in the region. Operations at the 1 million barrel-per-day export terminal, which provides Azeri crude oil to international markets, were halted on Monday and were supposed to have remained shut until the end of Wednesday at least.

The only thing materially bullish for oil and other commodities on Wednesday was a weakening of the dollar, which experienced a modest drop. 

The has been trying to find its footing since Federal Reserve Chair Jerome Powell said on Tuesday that the Fed wished to give disinflation, which has just begun, a chance to work instead just resorting to higher interest rates to bring hovering at 6.5% per annum to the central bank’s target of 2%. The dollar, however, got a morale boost on Wednesday when New York Fed President John Williams said U.S. interest rates need to stay high for ‘a few years’ to bring inflation down meaningfully.

New York-traded West Texas Intermediate, or WTI, crude for settled up $1.33, or 1.7%, at $78.47 per barrel.

The U.S. crude benchmark had risen more than 5% in the prior two sessions after plunging 7.5% last week, to a three-week low of $73.11, on recession fears and the uncertainty about the direction for U.S. interest…