Money managers shrugged off the failure of the world's biggest oil producers to agree on an output freeze as US gasoline demand surged.
West Texas Intermediate crude surged 8.3% the week after talks in Doha collapsed. Investors focused on falling US output and higher fuel use as the peak summer driving season approaches. American gasoline consumption rose to 9.25 million barrels a day in March, an all-time high for the month, the American Petroleum Institute said April 21.
"It doesn't make sense to go short ahead of summer because of strong gasoline demand," said Scott Roberts, co-head of high yield investments and manager of US$2.7 billion ($3.7 billion) at Invesco Advisers Inc in Atlanta. "Refiners are coming back and with that crude demand."
Speculators' net-long position in benchmark US crude jumped to the highest since May of last year in the week ended April 19, according to data from the Commodity Futures Trading Commission. Long positions rose to an 11-month high while shorts declined.
Crude fell as much as 6.8% on April 18, the day after the meeting in Doha ended without an agreement to limit supplies amid a global glut. It settled down 1.4% as a strike by oil workers in Kuwait, OPEC's fourth-biggest producer, eased the decline.
"Investors are looking for larger exposure to crude oil and showing a continuing willingness to buy on the dips," said Tim Evans, an energy analyst at Citi Futures Perspective in New York. "The market reaction to the lack of a production freeze ended in hours."
Futures rose after government data on April 20 showed that US crude output slumped to the lowest since October 2014. Demand from refiners has risen 600,000 barrels a day since February. Surging Demand US gasoline consumption, averaged over four weeks, rose 3.9% from a year earlier to 9.39 million barrels a day through April 15, EIA data show. Demand this summer will increase 1.4 per cent to a record, the EIA said April 12.
"Gasoline demand is quite strong and that's all price driven," said Thomas Finlon, director of Energy Analytics Group LLC in Wellington, Florida. "Demand for gasoline should provide support for crude."
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West Texas Intermediate crude surged 8.3% the week after talks in Doha collapsed. Investors focused on falling US output and higher fuel use as the peak summer driving season approaches. American gasoline consumption rose to 9.25 million barrels a day in March, an all-time high for the month, the American Petroleum Institute said April 21.
"It doesn't make sense to go short ahead of summer because of strong gasoline demand," said Scott Roberts, co-head of high yield investments and manager of US$2.7 billion ($3.7 billion) at Invesco Advisers Inc in Atlanta. "Refiners are coming back and with that crude demand."
Speculators' net-long position in benchmark US crude jumped to the highest since May of last year in the week ended April 19, according to data from the Commodity Futures Trading Commission. Long positions rose to an 11-month high while shorts declined.
Crude fell as much as 6.8% on April 18, the day after the meeting in Doha ended without an agreement to limit supplies amid a global glut. It settled down 1.4% as a strike by oil workers in Kuwait, OPEC's fourth-biggest producer, eased the decline.
"Investors are looking for larger exposure to crude oil and showing a continuing willingness to buy on the dips," said Tim Evans, an energy analyst at Citi Futures Perspective in New York. "The market reaction to the lack of a production freeze ended in hours."
Futures rose after government data on April 20 showed that US crude output slumped to the lowest since October 2014. Demand from refiners has risen 600,000 barrels a day since February. Surging Demand US gasoline consumption, averaged over four weeks, rose 3.9% from a year earlier to 9.39 million barrels a day through April 15, EIA data show. Demand this summer will increase 1.4 per cent to a record, the EIA said April 12.
"Gasoline demand is quite strong and that's all price driven," said Thomas Finlon, director of Energy Analytics Group LLC in Wellington, Florida. "Demand for gasoline should provide support for crude."
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