NEW YORK (Reuters) - Oil ended up on Wednesday as a weaker dollar and lower U.S. crude stockpiles provided a modest bounce off six-year lows hit the previous session, when worries about China’s plummeting currency and economic slowdown deflated prices.
Concerns that U.S. inventories could build again from higher crude imports and refinery outages kept a lid on the rebound.
“The market needed a big drawdown to reverse the current trends and didn’t get it,” said Chris Jarvis, analyst at Caprock Risk Management in Frederick, Maryland.
Crude stockpiles in the United States fell by 1.7 million barrels last week, just short of market expectations for a draw of 1.8 million barrels, government data showed.
Gasoline inventories also fell, by 1.3 million barrels versus the 647,000 barrels forecast.
But U.S. crude imports rose by 393,000 barrels per day to 7.0 million bpd. Distillates, which included diesel and heating oil, jumped by 3.0 million barrels, above the 1.3 million-barrels expected.
U.S. crude futures CLc1 settled up 22 cents, or 0.5 percent, at $43.30 a barrel, after gaining almost 80 cents at the session high. The market lost $1.88, or more than 4 percent, on Tuesday, settling at $43.08 a barrel, its lowest since March 2009.
Futures of Brent LCOc1, the global benchmark, closed up 48 cents, or 1 percent, at $49.66 a barrel, after a session high at $50.01.
The refining margin, or “crack,” for gasoline CL-RB1=R hit a 3-week high above $31 a barrel as gasoline futures RBc1 rose 4 percent after the large draw for the fuel last week.
The dollar fell 1 percent against a basket of other currencies .DXY, weighed down by doubts over whether the U.S. Federal Reserve will raise interest rates after China’s currency devaluation drove the yuan to a four-year low.
China is the No. 2 oil consumer after the United States and a weaker yuan erodes its purchasing power for dollar-denominated crude. [FRX/] [MKTS/GLOB]
The International Energy Agency said athough low fuel prices were stimulating global demand for oil, the crude glut was likely to persist through 2016. [IEA/M]
Capacity at the 413,500-barrel per day Whiting refinery has been cut by 60 percent, to 165,000 bpd, due to a major repair that could take over a month.
The powerformer at the 238,000 bpd Linden refinery, which produces products used in blending gasoline, could be shut a couple of weeks.
Additional reporting by Christopher Johnson and Lisa Barrington in London and Henning Gloystein in Singapore; Editing by Dale Hudson, David Gregorio and Alan Crosby