Oil Futures Shrug Off Large Build in U.S. Inventories, On Course for Largest Q3 Gain in 13 Years

Crude oil futures prices surged strongly to the highest level in nearly four months on Wednesday even after the release of U.S. data that showed domestic stockpiles rose more than expected last week.

Contracts of West Texas Intermediate crude for November delivery advanced 1.8 percent to $50.79 a barrel, which is the strongest level since May 25th. Oil prices briefly softened on Wednesday after data from the U.S. Energy Information Administration Wednesday indicated that domestic crude supplies climbed by 4.6 million barrels for the week ended September 15.

The reading was well above analysts’ forecast calling for a rise of 2.4 million barrels while a report published by the American Petroleum Institute late Tuesday showed a build of 1.4 million barrels only.

Oil is heading towards its largest third-quarter gain in 13 years as prices were supported by comments from Iraqi oil minister who claimed that the Organization of the Petroleum Exporting Countries and its allies are extending or deepening output cuts in an attempt to reduce a global supply glut.

Speaking at an energy conference on Tuesday, Iraqi oil minister Jabar al-Luaibi said that OPEC and other producers are considering a range of options to help rebalance the crude oil market and prop up the price after the current agreement’s expiries in March. Crude oil prices have risen about 16 percent this quarter, on course for the strongest third-quarter performance since 2004.

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