Strong Gasoline Demand Lifts Oil, but High OPEC Supplies Temper Gains

Oil rose on Wednesday, supported by strong demand for gasoline, but rising output from OPEC producers revived concerns about a persistent overhang of excess crude.

Brent crude futures LCOc1 were up 21 cents at $49.05 a barrel by 1204 GMT, while U.S. West Texas Intermediate crude futures CLc1 were up 14 cents at $46.50 a barrel.

While U.S. crude stocks rose by 1.6 million barrels to 497.2 million barrels in the week to July 14, gasoline stocks fell by a whopping 5.4 million barrels, the American Petroleum Institute said on Tuesday.

“The (gasoline) draws reported by the API are very large and gasoline was already strong,” Olivier Jakob of oil consultancy Petromatrix said.

“As long as you have gasoline that strong, it’s very difficult to sell crude oil aggressively.”

Refinery upsets on the U.S. East Coast pushed the U.S. gasoline crack spread RBc1-CLc1, or the profit from refining crude into the motor fuel, to a three-month high at over $20 a barrel.

But supplies from the Organization of the Petroleum Exporting Countries remain high, largely due to rising output from member states Nigeria and Libya, casting a shadow on efforts by the group to rebalance the market.

read more/source: http://www.reuters.com/article/us-global-oil-idUSKBN1A4042?il=0