Oil prices shrug off surprise US inventory buildup, gain ground

Oil futures rose nearly one percent with US crude climbing off June 22 lows, while Brent rebounded from April 17 lows, following earlier data from the US, the world's largest energy consumer, including the EIA report that showed a surprise inventory buildup. 

As of 05:50 GMT, US crude futures due on August 15 rose 0.91% to $68.70 a barrel from the opening of $68.06, while Brent futures due on September 15 added 1.46% to $73.20 a barrel from the opening of $72.16, as the dollar index eked out 0.06% gains to 95.04 from the opening of 94.98. 

US Housing Data 

Earlier US data showed housing starts fell 12.3% to an annualized 1.173 million units in June, compared to a 4.8% rise in May to 1.337 million, while analysts expected a 4.8% rise to 1.320 million. 

Building permits fell 2.2% to 1.273 million, compared to a 4.6% drop in May to 1.301 million, while analysts expected a 2.2% rise to 1.330 million. 

Surprise Buildup 

The Energy Information Administration released its report on US crude inventories, showing a buildup of 5.8 million barrels in the week ending July 13, compared to a 12.6M drop in the previous reading, while analysts expected a 3.6M decline, with total stocks now up to 411.1 million barrels, which is 2% below the five-year average for this time of year.

Gasoline stocks on the other hand fell 3.2 million barrels, still 5% above five-year averages, while distillate stocks, including heating fuel, fell 0.4 million barrels, making them 13% below averages. 

Libya's state oil corporation halted deliveries at the Zaiwa terminal due to low production after the Sharara oil field, one of the largest in the country, was hit by an attach, with five workers kidnapped.  

US Oil Rig Count 

Baker Hughes reported no change in the US oil rig count last week at 863 rigs, already the highest since March 2015. 

US production has jumped 29% from mid-2016 levels to a total of 10.9 million bpd, a record high, passing Saudi Arabia's 10.7 million bpd, and nearing Russia's 11.1 million bpd