Oil Prices spike into the close - Jan 24
Posted: Wed Jan 24, 2018 6:29 pm
Crude oil prices settled sharply higher as data showing US domestic production fell for the tenth-straight week offset a rise in production to nearly 10 million barrels a day. On the New York Mercantile Exchange crude futures for March delivery rose 1.8% to settle at $65.69 a barrel, while on London's Intercontinental Exchange, Brent gained 0.96% to trade at $70.64 a barrel. The front month NYMEX contract moved another $0.14/bbl after the close and is sitting at $65.83 at the time of this post.
Inventories of U.S. crude fell by roughly 1.071 million barrels for the week ended Jan. 19, beating expectations for of a draw of one million barrels. The tenth-straight weekly draw in crude supplies surprised some market participants as the American Petroleum Report (API) released Tuesday showed crude supplies unexpectedly rose by 4.8 million barrels, while a weaker dollar was also said to be a supportive factor for the sharp uptick in oil prices.
U.S. oil production is rising, but it looks like we will need every drop.
Q1 is when U.S. crude oil inventories must grow, so we have enough oil when the annual spike in demand comes in Q2. Last year, demand for oil increased by 2.3 million barrels per day from Q1 to Q2. If U.S. crude oil inventories do not start going up soon, the U.S. market will be extremely tight in a few weeks.
Inventories of U.S. crude fell by roughly 1.071 million barrels for the week ended Jan. 19, beating expectations for of a draw of one million barrels. The tenth-straight weekly draw in crude supplies surprised some market participants as the American Petroleum Report (API) released Tuesday showed crude supplies unexpectedly rose by 4.8 million barrels, while a weaker dollar was also said to be a supportive factor for the sharp uptick in oil prices.
U.S. oil production is rising, but it looks like we will need every drop.
Q1 is when U.S. crude oil inventories must grow, so we have enough oil when the annual spike in demand comes in Q2. Last year, demand for oil increased by 2.3 million barrels per day from Q1 to Q2. If U.S. crude oil inventories do not start going up soon, the U.S. market will be extremely tight in a few weeks.