NYMEX crude gains in Asia as API data shows drop in distillate, gasoline

Investing.com - Crude oil prices rose in Asia on Wednesday after industry data on U.S. stocks showed sharp drops in distillate and gasoline supplies.

The American Petroleum Institute said that crude oil supplies rose 4.8 million barrels last week, while distillate stocks eased 641,000 barrels and gasoline supplies fell 2.6 million barrels.

On the New York Mercantile Exchange, WTI crude for May delivery drose 0.39% to $47.58 a barrel.

Investors await Wednesday's weekly inventory report from the Energy Information Administration (EIA).

Last week, the EIA said oil supply in the U.S. for the week ending Mar. 4 grew by 9.6 million barrels to reach an 80-year high at 458.5 million.

At the Cushing Oil Hub in Oklahoma, inventories for the week ending Mar. 4 grew by 2.8 million barrels as storage levels reportedly exceeded 70% capacity.

Overnight, prices for Texas light sweet futures surged to a daily high of $48.35 on Tuesday morning following the U.S. Labor Department's release of the Consumer Price Index (CPI) for the month of February, before wavering for the remainder of the day. WTI crude reached a daily low of $47.20 in U.S. afternoon trading.

During an extremely volatile month of March, analysts have viewed the strength of the dollar as one of the main indicators of the fluctuations in oil prices. In recent days, energy traders have used a weaker dollar to hedge their positions in crude oil.

The U.S. Department of Labor on Tuesday said its Consumer Price Index (CPI) rose 0.2% for February, one month after declining 0.1%. The slight uptick last month ended a three-month streak of declines. On a year-over-year basis the CPI remained unchanged from its February 2014 level, though analysts had forecasted it to slip by 0.1% from last year's figure.

On the Intercontinental Exchange (ICE), meanwhile, Brent oil for May delivery fell 1.41% to 55.13 a barrel on Tuesday.

Increased storage levels in the U.S. have exacerbated fears that Cushing could reach full capacity sooner than expected, a development that may cause oil prices to plunge. By comparison, inventory levels at Cushing this time last year were at roughly 25% capacity.

Oil in the U.S. is being pumped at its highest level in more than 30 years, a trend Opec is blaming on the shale boom. Production could level off sooner than expected if the U.S. reaches capacity before the start of the summer.