By August 22, 2017 Read More →

Oil prices rise on expected US crude drawdown

Oil prices

Oil prices rose slightly on Tuesday as investors await confirmation of an expected drop in US crude inventories. Repsol photo.

Oil prices edge up Tuesday

Oil prices rose slightly on Tuesday on expectations that US crude stocks will decline, but price gains were tamed on reports that the Sharara oil field in Libya has been reopened.

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Brent crude rose 35 cents to $52.01/barrel by 12:57 p.m. EDT and US WTI inched up 42 to $47.95/barrel.  US crude futures for September delivery was up 36 cents to $47.73 and the October contract was up 42 cents to $47.95.

According to a Reuters poll, US crude inventories are likely to fall for an eighth straight week.  Analysts polled predict crude stocks to fall by 3.4 million barrels.

On Tuesday afternoon, the American Petroleum Institute will release its data on US crude stocks, followed by the US Energy Information Administration on Wednesday morning.

After a three-day pipeline blockade due to protests by armed groups and oil workers, Libya’s 280,000 barrels per day (b/d) Sharara oil field is gradually reopening, according to field workers.

A tropical depression expected to form over the southwestern Gulf of Mexico on Wednesday or Thursday may impact prices.

“Traders of crude oil and gasoline will also have particular interest in the remnants of Tropical Storm Harvey expected to strengthen to Category 1 hurricane status as it crosses the Gulf of Mexico toward a possible Friday landfall on the Texas Coast,” Reuters reports Tim Evans, Citi Futures’ energy futures specialist, said in a note.

“While not a major storm, this will at least serve as a drill for refiners along the coast, in our view.”

AT 9.5 million b/d, US oil output hit its highest point since March, but some analysts are expecting production to slow as oil companies cut back on drilling.

Despite the increase in US production, commercial crude inventories in the States have fallen by almost 13 per cent since March.

“Another decline in U.S. crude stocks may push prices somewhat higher again, but the upside may be limited – especially if U.S. crude production ticks higher again,” said Hans van Cleef, energy economist at ABN AMRO told Reuters.

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Posted in: Energy Financial

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