Oil steadies on U.S. rig count drop, small crude build
An oil pump jack can be seen in Cisco, Texas, August 23, 2015. REUTERS/Mike Stone
By Barani Krishnan
NEW YORK (Reuters) - Crude futures erased early losses to settle steady on Wednesday after a smaller-than-expected supply build in the United States and drop in the number of U.S. rigs actively drilling for oil.
Traders and investors also covered short positions before U.S. markets close for Thursday's Thanksgiving holiday, analysts said.
"People did not want to be caught short ahead of the holiday with the global political tensions," said Phil Flynn, analyst at Chicago-brokerage Price Futures Group. "The combination of that and a drop in the rig count earlier helped push us higher.”
On Tuesday, crude futures hit two-week highs after Turkey shot down a Russian warplane for alleged intrusion of its airspace, heightening political tensions in the Middle East.
Benchmark Brent crude futures
U.S. crude's West Texas Intermediate (WTI) futures
Trading volumes were light, typical of pre-holiday activity. Just over 360,000 lots of WTI futures were traded, versus Monday's volume above 500,000, Reuters data showed.
Oil prices rebounded after the U.S. Energy Information Administration said crude stocks across the country rose 961,000 barrels last week. A preliminary inventory report by industry group American Petroleum Institute had anticipated a 2.6-million barrel rise while a Reuters poll of analysts forecast a 1.2 million build.
Oil services firm Baker Hughes said the U.S. oil rig count fell by nine this week. Oil drillers have cut rigs in 12 of the past 13 weeks, Baker Hughes data showed. [RIG/U]
Not all oil-related data on Wednesday was positive.
The EIA said gasoline stockpiles
Inventories of distillates
While U.S. crude stocks as a whole rose by less than 1 million barrels, the Cushing, Oklahoma, delivery hub for WTI futures
"We suspect rallies, if any, will be rather short-lived," said Tariq Zahir, a trader in crude oil spreads at Tyche Capital Advisors in Long Island, New York.
(Additional reporting by Meeyoung Cho; Editing by Chris Reese and David Gregorio)
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