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Crude Oil and Natural Gas Trade On A Positive Note Ahead Of EIA Inventory

By:
Barry Norman
Updated: Aug 21, 2015, 13:00 UTC

In the Asian session crude oil continues to gain trading at 92.72 adding 18 cents. West Texas Intermediate oil traded near the highest level in two weeks

Crude Oil and Natural Gas Trade On A Positive Note Ahead Of EIA Inventory

Crude Oil and Natural Gas Trade On A Positive Note Ahead Of EIA Inventory
Crude Oil and Natural Gas Trade On A Positive Note Ahead Of EIA Inventory
In the Asian session crude oil continues to gain trading at 92.72 adding 18 cents. West Texas Intermediate oil traded near the highest level in two weeks after an industry report showed U.S. crude stockpiles fell for the first time in a month. The API weekly report released prior to the official EIA inventory showed a decline in stock after the EIA showed a surprising increase in inventory last week. Crude supplies declined by 1.4 million barrels. Analysts polled were looking for a 2.3 million-barrel climb. Gasoline inventories also fell by 3.1 million barrels, while distillate stockpiles lost 2.2 million barrels, the trade group said. Analysts forecast a fall of 1.5 million barrels for gasoline supplies and a 2 million-barrel decline for distillate stockpiles.  This week’s EIA projected inventory is expected to show that crude oil added 2.4mn barrels differing from the API release yesterday.

Brent crude oil prices declined for the third straight session in choppy trading session, while US oil posted a fourth consecutive gain, tightening the spread between the two contracts to the narrowest since January. On Tuesday the EIA cut its 2013 world oil demand forecast but also cut the forecast for non-OPEC output having a neutral effect on the markets.

In its monthly report released Tuesday, the Organization of the Petroleum Exporting Countries said it expected world oil demand to grow by 800,000 barrels a day in 2013, unchanged from its previous forecast. OPEC said growth in non-OPEC oil supply of around 1 million barrels a day would cut into the organization’s market share.

The US dollar also edged down a bit adding to the attraction to crude oil buyers this morning. Japanese political parties today agreed with one of PM Abe’s picks for deputy governor hanging in the balance after the largest opposition group opposed him. Your Party, the Japan Restoration Party, and the New Renaissance Party today announced their intentions on the confirmation votes for Haruhiko Kuroda to become BOJ governor and Hiroshi Nakaso and Kikuo Iwata to be deputy chiefs. This assures Kuroda appointment on Thursday and guarantees huge stimulus packages almost immediately helping to support demand for crude oil.

Natural gas is trading at 3.640 adding 10 cents in the Asian session on a weaker US dollar although yesterday natural gas eased slightly on profit booking, as traders questioned whether prices of the fuel used for heating have reached a ceiling as spring weather approaches. U.S. natural gas futures ended lower on Tuesday, pressured by profit taking and technical sell off. Natural gas is expected to move in a range as the end of the winter season with overall high production is likely to keep prices in check. Traders will closely monitor this week’s EIA inventory report due tomorrow.

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