Oil rebounds as US crude production falls

NEW YORK, United States – Oil rebounded Wednesday, lifted by a government report showing a decline in US crude production and a deadly explosion and fire on an oil platform in the Gulf of Mexico.

The US benchmark, West Texas Intermediate for May delivery, surged $2.49 to close at $50.09 a barrel on the New York Mercantile Exchange, snapping a three-day losing streak.

Brent North Sea crude for delivery in May, the global benchmark, settled at $57.10 a barrel in London trade, an increase of $1.99 from Tuesday’s closing level.

The latest Department of Energy weekly petroleum report, as expected, showed another increase in crude inventories to a new record high of 471.4 million barrels.

But it also revealed a slight decline in US crude production, by 36,000 million barrels per day, ending a long climb to record output levels that has contributed to the global supply glut.

The DoE report “was bearish fundamentally, with a fairly large build of inventory, but there were some bullish facts,” said Bart Melek of TD Securities.

Adding to support for the market was an explosion and a fire on an offshore oil platform operated by Mexico’s Pemex on Wednesday, killing at least four workers, injuring 16 and forcing 300 to be evacuated.

Firefighting vessels were battling the raging blaze as the oil market closed. Melek cited the incident as underpinning prices.

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