Oil steady after biggest gain in three weeks on fuel supply drop

Bloomberg

Oil traded near $41 a barrel after U.S. gasoline supplies fell the most since April, retreating from the highest seasonal level in at least two decades.
Futures were little changed in New York after advancing as much as 1.4 percent earlier. Prices climbed 3.3 percent on Wednesday, the most in three weeks. Inventories of the motor fuel slid by 3.26 million barrels last week, according to data from the Energy Information Administration. Crude output fell for the first time in four weeks, while stockpiles unexpectedly expanded. Refinery rates and crude imports rose.
Oil rebounded after tumbling more than 20 percent into a bear market, closing below $40 a barrel on Tuesday for the first time since April. Citigroup Inc. to Bank of America Merrill Lynch predicted the slump would be short-lived, while Societe Generale SA said the price correction would be limited due to a better balance between supply and demand.
“For those focusing on gasoline, it was encouraging,” Tamas Varga, an analyst at PVM Oil Associates Ltd. in London, said of yesterday’s EIA report. “Inventories in this product fell surprisingly hard. But that does not change the fact the U.S. is flooded with oil.”
West Texas Intermediate for September delivery was at $40.90 a barrel on the New York Mercantile Exchange, up 7 cents, at 9:04 a.m. London time. The contract climbed $1.32 to $40.83 on Wednesday, the biggest gain since July 12.