Monday, 06 July, 2020

Oil Prices Jump On Bullish Inventory Data

Oil Price Fundamental Weekly Forecast – Fed’s Powell Could Shed Light on Future Demand Oil Prices Jump On Bullish Inventory Data
Ginger Lawrence | 10 July, 2019, 20:42

U.S. West Texas Intermediate and international-benchmark Brent crude oil futures are surging on Wednesday shortly before the regular session opening in reaction to a bigger than expected draw down in U.S. inventories, according to an industry report.

Oil pumps are seen after sunset outside Vaudoy-en-Brie, near Paris, France November 14, 2018.

Brent crude futures LCOc1 were up $1.92, or 3%, to $66.08 a barrel by 10:49 a.m. EDT (1449 GMT).U.S.

Meanwhile, a tropical disturbance may become a storm later on Wednesday or Thursday, the National Hurricane Center said early Wednesday.

The West Texas Intermediate for August delivery climbed 17 cents to settle at 57.83 US dollars a barrel on the New York Mercantile Exchange, while Brent crude for September delivery rose 5 cents to close at 64.16 dollars a barrel on the London ICE Futures Exchange.

Official figures from the government's Energy Information Administration (EIA) are due later on Wednesday.

The current sideways action and the bouncing between technical 50% levels suggests prices are almost balanced at this time, which means it may take some fresh stimulus to move prices out of the range.

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The Gulf of Mexico is home to 17% of US crude oil outputwhich stands at around 12 million barrels per day (bpd).

Oil and natural gas producers in the U.S. Gulf of Mexico began evacuating workers and shutting in output as a storm gathers strength off the coast of Florida.

Chevron Corp (CVX.N), Royal Dutch Shell Plc (RDSa.L), BP Plc (BP.L) and BHP Group Ltd (BHP.AX) are removing staff from 15 offshore energy platforms. Exxon MobilXOM.N said it was "closely monitoring " the disturbance to determine if its facilities might beaffected.

The alliance, known as OPEC+, agreed last week to extend their supply-cutting deal until March 2020. -China trade war, heading into its second year, dampens prospects for global economic growth. Brent has risen nearly 20% in 2019 supported by the pact and also tensions in the Middle East, especially concerns about the row over Iran's nuclear program.

The U.S. and global benchmarks have risen this year as OPEC and big producers like Russian Federation have honored commitments to cut production and support prices.

Aside from that, a strong employment figure in June, which revealed USA economy added 2,24,000 new jobs in June, its best figure in five months, would likely to add a bullish breeze to crude oil future prices, meanwhile easing some concerns related to global slowdown risks.

Still, U.S. crude oil production is forecast to rise to a fresh record of 12.36 million barrels per day (bpd) in 2019 from the high of 10.96 million bpd past year, the EIA's Short Term Energy Outlook said on Tuesday.