Crude oil ended the month slightly above the $45 price and gained 65 points in the morning session to trade at 45.74 but remains in a tight trading range.
Crude oil ended the month slightly above the $45 price and gained 65 points in the morning session to trade at 45.74 but remains in a tight trading range. Brent oil gained 30 cents to reach 48.81. The spread is barely wider than $3. U.S. crude oil ended slightly lower on Wednesday, after a report from the U.S. Energy Information Administration showed an increase in crude stockpiles last week, although the loss was somewhat limited as domestic production declined due to the refinery maintenance season.
Crude oil futures dropped 24 percent for the quarter, and 8.4 percent for the month.
Data from the U.S. Energy Information Administration showed crude stockpiles in the U.S. to have climbed 4.0 million barrels in the week ended September 25, while analysts anticipated an increase 0.1 million barrels. Total U.S. crude stockpiles aggregated 457.9 million barrels end last week.
The price for West Texas Intermediate crude oil, the U.S. benchmark, has struggled to break the $50 mark. In early Wednesday trading, WTI was more than 50 percent lower than this time last year.
Gasoline supplies rose 3.3 million barrels, with analysts anticipating a decrease 0.5 million barrels last week. Distillate stockpiles, including heating oil, fell 0.3 million barrels last week, even as analysts expected a decline of 1.2 million barrels.
Total domestic production of crude oil for the week dropped 48,000 barrels to about 9.1 million barrels a day. The EIA said refinery utilization dropped to 89.8 percent due to the maintenance season, from 90.9 percent a week earlier.
Chinese PMI data released early in the morning was slightly better than expected which is supporting the gain in oil prices. The third quarter has been a bad one for global markets, with a rout in commodities putting the asset class among the hardest hit by China slowdown fears and U.S. interest rate uncertainty. Analysts said that growing signs of weakness in China’s economy has prompted investors to rethink the value of a host of commodities.
These valuations have long been driven by strong demand from China, which is the world’s second largest economy and the world’s largest consumer of many of these raw materials. The IMF’s latest edition of the World Economic Outlook report attributes slow growth to a decline in global commodity prices experienced in the last three years. The slowdown, according to the IMF, will result into weaker investments both in these countries and developing nations that are dependent on foreign direct investments hence risking their growth prospects.