After spending the first four days of the week under pressure due to concerns that a weakening U.S. economy would lead to lower demand, U.S. West Texas Intermediate crude oil futures are trading higher on Friday after the release of a report showing a stronger-than-expected U.S. labor market. Crude oil is still expected to close lower for the week, but the news has somewhat eased the growing bearish tone.
Despite the decent short-covering rally on Friday, the news is not likely to offset the negative news that had been piling up all week, including worries about rising U.S. supply, concerns over a weakening Chinese economy, renewed tensions over U.S.-China trade relations, and reservations over whether OPEC and its allies would announce deeper output cuts.
U.S. Energy Information Administration Weekly Inventories Report
Crude oil inventories rose by 5.7 million barrels in the week to October 25, the U.S. Energy Information Administration (EIA) said on Wednesday, compared with analyst expectations for an increase of 494,000 barrels.
On Tuesday, the American Petroleum Institute (API) reported a decline of 708,000 barrels, raising hopes that official figures would also show a fall.
Crude stocks at the Cushing, Oklahoma futures delivery hub rose for a fourth straight week, gaining 1.6 million barrels last week, the EIA said.
However, gasoline and distillate inventories extended their declines even as refiners ramped up production, it said.