Oil climbed the most in three years in New York on Thursday as data showed the U.S. economy grew more than previously estimated.
West Texas Intermediate futures rose as much as 9.6 percent, the biggest intraday gain since June 2012. U.S. gross domestic product grew at a 3.7 percent annualized rate in the second quarter, exceeding all estimates of economists surveyed by Bloomberg.
Oil had held below $40 this week as concern over slowing demand in China fueled volatility in global markets. Prices are down about 32 percent from this year’s closing peak in June on speculation that a world supply glut will be prolonged. OPEC members are sustaining output while U.S. stockpiles remain more than 90 million barrels above the five-year seasonal average.
“We’re getting whiplash moves,” said Matt Sallee, who helps manage $17.7 billion in oil-related assets at Tortoise Capital Advisors in Leawood, Kansas. “The shorts are skittish and whenever there’s any positive data they cover very quickly.”
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West Texas Intermediate for October delivery climbed $3.47, or 9 percent, to $42.07 a barrel by late morning on the New York Mercantile Exchange. The contract touched $37.75 on Monday, the lowest level since February 2009. Prices have decreased 21 percent this year.
Brent for October settlement advanced $3.43, or 8 percent, to $46.57 a barrel on the London-based ICE Futures Europe exchange. The European benchmark crude traded at a $4.56 premium to WTI.
Crude’s gain triggered increases in shares of oil and gas producers. Chevron, the second-largest U.S. energy company, surged 5.3 percent to $76.965 around noon.
Last quarter’s GDP growth exceeded the 2.3 percent gain the Commerce Department reported last month. The report comes as Federal Reserve policy makers debate whether growth is strong enough to withstand the first increase in the benchmark interest rate since 2006.
Shell declared force majeure on Bonny Light after the closing of two pipelines in Nigeria. The producer said it was repairing the lines.
U.S. crude stockpiles fell 5.45 million barrels to 450.8 million last week, the Energy Information Administration reported Wednesday. Stockpiles at Cushing, Oklahoma, the nation’s biggest oil-storage hub and the delivery point for WTI futures, expanded for a second week to 57.7 million barrels.
“The market has fallen very quickly,” said Michael Hiley, head of over-the-counter energy trading at New York-based LPS Partners. “You run out of sellers, and the market goes back up. Fundamentals just don’t change that fast in commodities.”
With assistance from Grant Smith in London and Moming Zhou in New York.