Oil rose as the falling dollar countered any concerns in the market over a steep gain in U.S. crude inventories to more than 500 million barrels for the first time since 1930.
Commodities rallied as the Bloomberg Dollar Index, which tracks the currency against major peers, fell as much as 1.9 percent. Oil futures briefly retreated after the Energy Information Administration reported that U.S. crude stockpiles climbed 7.79 million barrels to 502.7 million last week. That was almost twice the 4 million-barrel increase projected by analysts surveyed by Bloomberg.
Oil dropped to a 12-year low in January amid brimming U.S. crude inventories and the outlook for increased exports from Iran after the removal of sanctions. The slump continues to take its toll on oil producers: Exxon Mobil Corp. reduced its drilling budget to a 10-year low, and Chevron Corp. saw its credit rating cut by Standard & Poor’s for the first time in almost three decades.
West Texas Intermediate for March delivery rose $2.40, or 8 percent, to $32.28 a barrel on the New York Mercantile Exchange. It fell 11 percent on Monday and Tuesday, the biggest two-day drop in almost seven years. The volume of all futures traded was 93 percent above the 100-day average at 2:45 p.m.
Brent for April settlement climbed $2.32, or 7.1 percent, to $35.04 a barrel on the London-based ICE Futures Europe exchange. The European benchmark crude closed at an $1.18 premium to April WTI.