Crude Oil Dips After Inventories Data

Crude Oil Dips After Inventories Data

Crude Oil Dips After Inventories Data

Prices have been supported this week by data showing declining commercial petroleum stocks in the USA and news that Saudi Arabia and Russian Federation - the world's two largest crude producers - want to extend the agreement to curb output after the deal expires in March 2018, likely through the end of next year.

Geopolitical events are often thought to be catalysts for oil exchange traded products, including the United States Oil Fund (NYSEArca: USO), which tracks West Texas Intermediate crude oil futures, and the United States Brent Oil Fund (NYSEArca: BNO), which tracks Brent crude oil futures, but investors should be careful with oil bets tied to the standoff between the Iraqi government and Kurdistan.

"The seizure of the Kirkuk oil fields a few weeks ago, coming on the heels of the Kurdish referendum for independence, led to a temporary sidelining of some 400,000 bpd". But the fundamental outlook has also shifted, with stockpiles falling and questions about the growth rate of US shale output also fueling gains. Canada saw a decline of 11 in the number of active oil and gas rigs.

Brent crude reached its highest level since July 2015 amid signs that oil-producing countries will extend efforts to combat a supply glut.

But the upturn will be less welcome for motorists bracing themselves for price rises at the petrol pumps, with household finances already under pressure thanks to the weakness of the pound helping to push inflation to a five-year high.

"The exports are ripping higher", Loewen said.

The dollar trimmed its earlier gains versus a basket of currencies following a Bloomberg report that U.S. President Donald Trump is leaning toward Federal Reserve Governor Jerome Powell as his pick to head the U.S. central bank.

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"I think the combination of short-covering and Chevron and Exxon both missing their production guidance for the third quarter has resulted in the market strength today", said Scott Shelton, energy futures broker with ICAP in Durham, North Carolina.

Given oil's implied volatility of 24.1%, United States crude oil futures could close between $50.88 and $54.40 per barrel in the next seven days with a probability of about 68%.

Iraq surpassed Saudi Arabia as a crude supplier to the U.S.in September, and it's poised to repeat that this month.

Echoing sentiments about a so-called Goldilocks number, Tamas Varga with London oil broker PVM said in an emailed market report that USA crude oil production numbers may be the governor on market direction.

U.S. crude production rose by 1.1 million bpd to 9.5 million bpd in the week ended October 20, according to U.S. Energy Information Administration (EIA) data.

Saudi Crown Prince Mohammed bin Salman said Friday his country would support the extension of an output cut agreement beyond its deadline next March, a move that would push prices higher with less production from the Kingdom, the world's biggest oil exporter.

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