By March 29, 2017 Read More →

Oil prices and optimism boosted, US crude inventories up less than expected

Oil prices

Oil prices rose in trading on Wednesday after the Energy Information Administration released a report showing US crude inventories had increased by less than expected. Pioneer Natural Resources photo.

Oil prices up 2 per cent Wednesday

Oil prices rose in trading on Wednesday after reports showed US crude inventories rose less than expected, Libyan supply disruptions continued and the OPEC supply cut deal extension looked as if it would likely be extended.

In the weekly report issued by the US Energy Information Administration on crude inventories, the agency reported stocks rose by 867,000 barrels in the week ending March 24.  Earlier in the week, analysts had anticipated the growth to be around 1.4 million barrels.

According to the EIA, more refineries geared up after seasonal maintenance and crude imports dropped.


Front-month Brent crude futures rose by $1.09 to $52.42/barrel, after hitting a session high of $52.46, the highest since March 16.  US crude WTI futures were up $1.14 to $49.51/barrel after hitting a high of $49.54, the highest since March 16.

US gasoline futures rose by 2.4 per cent to the highest in three weeks after data from the EIA showed a 3.7 million barrel drop in gasoline stocks last week, much higher than anticipated.

“Higher demand for gasoline and distillates in the U.S. contributed toward larger-than-expected drawdowns in their stockpiles,” said Abhishek Kumar, Senior energy analyst at Interfax Energy’s Global Gas Analytics told Reuters.

“Improving refinery utilization rates in the country will help cater for rising demand for the two refined products in the country over the coming weeks.”

Disruptions in production amounting to 240,000 b/d from oilfields in western Libya also contributed to the bump in oil prices.  On Tuesday, the National Oil Corporation declared force majeure after pipelines from two oilfields were shut down by protesters.

Optimism over a possible extension of the OPEC supply cut deal also helped boost oil prices on Wednesday.  On Tuesday, Iran’s Oil Minister Bijan Zangeneh said OPEC and other producing countries were likely to extend the deal to the end of the year.

In a Reuters report, USB oil analyst Givanni Staunovo said he expects Brent crude to break through the $60/barrel mark over three months before levelling off in six months to $60 and then falling back to $57/barrel in 12 months as US shale and OPEC production increases.




Posted in: Energy Financial

Comments are closed.